Arifatmi v. Lucky Dragon, LLC et al

Filing 26

ORDER granting in part and denying in part 11 Motion for Summary Judgment. Signed by Judge Sarah S. Vance on 4/11/2016. (mmm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
BAMBANG ARIFATMI

CIVIL ACTION

VERSUS

NO. 15-1101

LUCKY DRAGON, LLC d/b/a
GEISHA SUSHI BISTRO AND
XIUFEI ZHANG

SECTION “R” (1)

ORDER AND REASONS
Plaintiff Bambang Arifatmi moves the Court for summary judgment on
his claim that defendant Lucky Dragon, LLC (d/b/a Geisha Sushi Bistro)
willfully violated the Fair Labor Standards Act, 29 U.S.C. § 201, et seq., by
failing to pay Arifatmi minimum wage. 1 For the following reasons, the Court
grants summary judgment on the issue of liability, but denies summary
judgment on the issues of willfulness and damages.

I.

BACKGROUND
From March 2011 to March 2015, plaintiff Bambang Arifatmi worked

as a server in defendant Lucky Dragon, LLC’s restaurant, Geisha Sushi

1

R. Doc. 11.

Bistro. 2 During Arifatmi’s employment, Lucky Dragon did not pay him
minimum wage; Arifatmi was paid in tips only. 3
According to Lucky Dragon, Arifatmi is the restaurant owner’s friend.4
While Arifatmi worked at Geisha Sushi Bistro, he was in the United States on
an F-1 Student Visa, which requires the visa-holder to obtain authorization
before working in the United States.5 Lucky Dragon admits that it did not
pay Arifatmi minimum wage because Arifatmi “failed to secure the proper
work authorization.” 6 According to the manager of Geisha Sushi Bistro,
Arifatmi was the only server who did not receive a regular minimum wage.7
Arifatmi also asked the manager “every . . . five [to] six months” why he did
not receive a check like the other servers. 8 Lucky Dragon argues that this

R. Doc. 11, Exhibits A-B, D-F (Hourly Summaries, 2011-2015); R. Doc. 11,
Exhibit H at 3, Answer to Interrogatory No. 8 (“[P]laintiff was designated as a
server.”).

2

See, e.g., R. Doc. 14-2 at 1 (Affidavit of Iva Octavia, co-owner of Lucky
Dragon, LLC) (“We allowed the plaintiff to work and he was compensated via tips
earnings.”).

3

4

Id.

5

Id.

6

Id.

R. Doc. 11, Exhibit C, at 65-66 (Deposition of Anthony Taylor, manager of
Geisha Sushi Bistro).
7

8

Id. at 64.

was a “practical” arrangement to help the restaurant owner’s friend while he
was in school and that Lucky Dragon thought it had complied with the Act. 9
After Arifatmi stopped working at Geishi Sushi Bistro, he filed this
lawsuit against Lucky Dragon and defendant Xiufei Zhang, alleging that
defendants willfully violated the minimum wage and tip credit provisions of
the Fair Labor Standards Act and retained improper “kickbacks.” 10 Arifatmi
now moves for summary judgment against Lucky Dragon on the alleged
violations of the minimum wage and tip credit provisions of the Act.

II.

LEGAL STANDARD
Summary judgment is warranted when “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); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 1069,

R. Doc. 14-2 at 1-2; R. Doc. 11, Exhibit C, at 63 (“I was under the influence of
[sic] we’re not going to file any taxes on him or anything to help him out . . . to help
him out because of school.”).

9

See R. Doc. 1. Arifatmi originally filed his complaint as a “Collective Action
Complaint.” No other putative plaintiff has opted-in to the suit, however, and
Arifatmi’s summary judgment arguments are particular to him. See generally
Cameron-Grant v. Maxim Healthcare Servs., Inc., 347 F.3d 1240, 1249 (11th Cir.
2003) (“Under § 216(b), the action does not become a ‘collective’ action unless
other plaintiffs affirmatively opt into the class by giving written and filed
consent.”).
10

1075 (5th Cir. 1994). When assessing whether a dispute as to any material
fact exists, the Court considers “all of the evidence in the record but refrain[s]
from making credibility determinations or weighing the evidence.” Delta &
Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99
(5th Cir. 2008).

All reasonable inferences are drawn in favor of the

nonmoving party, but “unsupported allegations or affidavits setting forth
‘ultimate or conclusory facts and conclusions of law’ are insufficient to either
support or defeat a motion for summary judgment.” Galindo v. Precision
Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); see also Little, 37 F.3d at
1075. “No genuine dispute of fact exists if the record taken as a whole could
not lead a rational trier of fact to find for the non-moving party.” EEOC v.
Simbaki, Ltd., 767 F.3d 475, 481 (5th Cir. 2014).
In nonjury cases, such as this one, 11 where the judge is the ultimate
finder of fact, “more lenient standard for summary judgment” is appropriate.
U.S. Fid. & Guar. Co. v. Planters Bank & Trust Co., 77 F.3d 863, 865 (5th
Cir. 1996). Specifically, at the summary judgment stage of a bench trial, the
judge may have “the limited discretion to decide that the same evidence,
presented to him or her as trier of fact in a plenary trial, could not possibly

R. Doc. 24 at 3 (“Trial will commence . . . before the District Judge without
a jury.”).

11

lead to a different result.” Id. at 866. That is, “if there are no issues of witness
credibility, the court may conclude on the basis of the affidavits, depositions,
and stipulations before it, that there are no genuine issues of material fact,
even though decision may depend on inferences to be drawn from what has
been incontrovertibly proved.” Id. Thus, “if a trial on the merits will not
enhance the court's ability to draw inferences and conclusions,” then the
court should draw those inferences “without resort to the expense of trial.”
In re Placid Oil Co., 932 F.2d 394, 398 (5th Cir. 1991).

III. DISCUSSION
The Fair Labor Standards Act generally provides that an employer shall
pay its employees wages “not less than . . . $7.25 an hour.”12 See 29 U.S.C. §
206(a)(1). For “tipped employees,” like restaurant servers, 13 the Act allows
the employer to pay wages below the minimum hourly wage of $7.25, so long
as the employer supplements the difference with the employees’ tips. See 29

Lucky Dragon does not dispute that it is subject to the Act. Compare R. Doc.
11-10 (Plaintiff’s Statement of Undisputed Material Facts), with, R. Doc. 14-1
(Defendant’s Contested Issues of Material Fact).
12

A “tipped employee” is “any employee engaged in an occupation in which he
customarily and regularly receives more than $30 a month in tips.” 29 U.S.C. §
203(t). “There is no dispute that . . . waiters[] are ‘tipped employees.’” Montano
v. Montrose Restaurant Assocs., Inc., 800 F.3d 186, 189 (5th Cir. 2015).

13

U.S.C. § 203(m). This exception to the general minimum wage requirement
is known as the “tip credit.” See generally Montano v. Montrose Restaurant
Assocs., Inc., 800 F.3d 186, 188 (5th Cir. 2015). An employer is eligible for
the tip credit, as it applies to a particular employee, only if he informs that
employee of the tip credit provision of the Act and allows the employee to
retain all of his tips. See 29 U.S.C. § 203(m); Montano, 800 F.3d at 188.
Even when the tip credit applies, the employer shall not pay his employees
an hourly wage less than $2.13. 29 C.F.R. § 531.50.
If an employer violates these minimum wage provisions, he is liable to
the wronged employee for “the amount of [the employee’s] unpaid minimum
wages,” as well as “an additional equal amount as liquidated damages.” 29
U.S.C. § 216(b); see also Arriaga v. Fla. Pac. Farms, LLC, 305 F.3d 1228,
1237 n.11 (11th Cir. 2002) (noting that the employer is required to reimburse
an employee only “up to the point that the minimum wage is met”). The
employer is generally liable for the unpaid wages due under the Act for the
two years preceding suit. See 29 U.S.C. § 255(a) (imposing two-year statute
of limitations period). If the employer willfully violated the Act, however, the
employer is liable for the employee’s unpaid wages for the three years
preceding suit. See id. (“[A] cause of action arising out of a willful violation
may be commenced within three years . . . .”); Saizan v. Delta Concrete

Prods. Co., Inc., 448 F.3d 795, 801 n.31 (5th Cir. 2006) (“The willfulness of
a particular violation determines the duration of time for which
compensation is recoverable.”).
An employer “willfully” violates the Act when he either knows or
“shows reckless disregard for . . . whether [his] conduct was prohibited.”
Ikossi-Anastasiou v. Bd. of Supervisors of La. Stat Univ., 579 F.3d 546, 552
(5th Cir. 2009) (quoting McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133
(1988)). “For example, employers act willfully when they know their pay
structures violate the FLSA or ignore complaints brought to their attention.”
Mohammadi v. Nwabuisi, 605 F. App’x 329, 332 (5th Cir. 2015) (citing
Ikossi-Anastasiou, 579 F.3d at 553 & n.24).

To prove willfulness, the

employee must do more than show that his employer knowingly engaged in
conduct that is ultimately deemed to violate the Act. The employee must
show that the employer knew (or recklessly disregarded), at the time of
engaging in the conduct, that this conduct violated the Act. See IkossiAnastasiou, 579 F.3d at 553 & n.24 (distinguishing between willful and nonwillful violations of the FLSA). An employer’s “good faith but incorrect
assumption” that he has complied with the Act does not constitute a willful
violation. Johnson v. Big Lots Stores, Inc., 604 F. Supp. 2d 903, 924 (E.D.

La. 2009) (collecting cases).

Even unreasonableness is insufficient to

establish that an employer willfully violated the Act. Id.
Here, it is undisputed that Lucky Dragon did not pay Arifatmi the
requisite minimum wage. Indeed, Lucky Dragon admits that it did not pay
Arifatmi any wages at all and instead compensated him only in tips.14 As a
“tipped employee,” Arifatmi was entitled to an hourly wage of at least $2.13.
See 29 C.F.R. § 531.50. Lucky Dragon’s argument that it did not pay Arifatmi
minimum wage because, as a student visa-holder, he “failed to secure the
proper work authorization and documentation” is no excuse.15 “[I]t is wellestablished that the protections of the Fair Labor Standards Act are
applicable to citizens and aliens alike and whether the alien is documented
or undocumented is irrelevant.” In re Reyes, 814 F.2d 168, 170 (5th Cir.
1987); accord Patel v. Quality Inn S., 846 F.2d 700, 706 (11th Cir. 1988)
(“[U]ndocumented workers are ‘employees’ within the meaning of the FLSA
. . . .”). Lucky Dragon’s arguments that Arifatmi agreed to this “practical
arrangement” and that Arifatmi ultimately earned more per hour than the
statutory minimum wage are legally immaterial as well. The Act requires an
R. Doc. 14-2 at 1 (“Plaintiff . . . was compensated via tips earnings. . . . The
[t]wo dollars and thirteen cents ($2.13)[,] defined as cash wages, was not
implemented . . . .”).

14

15

See R. Doc. 14 at 4.

employer applying the “tip credit” to pay his employees an hourly wage of at
least $2.13. Gray v. Powers, 673 F.3d 352, 354 (5th Cir. 2012) (“Tipped
employees must receive a wage equal to the minimum wage, though tips can
be counted . . . as long as the employer pays the tipped employee a minimum
of $2.13 per hour.”). An employee cannot “abridge[] by contract or otherwise
waive[]” his right to a minimum wage from his employer “because this would
nullify the purposes of the statute and thwart the legislative policies it was
designed to effectuate.” See Barrentine v. Arkansas-Best Freight Sys., Inc.,
450 U.S. 728, 740 (1981) (collecting cases). Therefore, the Court finds
summary judgment warranted on the issue of Lucky’s Dragon’s liability.
Regarding whether Lucky Dragon’s violation was willful, however, the
Court finds that Arifatmi has failed to show that there is no genuine dispute
of material fact.

Arifatmi argues that Lucky Dragon’s willfulness is

demonstrated by the restaurant’s paying its other servers the federallymandated $2.13 per hour and by the restaurant’s admitting that it
compensated Arifatmi in only tips while he was in the United States on a
student visa.16 This is insufficient. Though Lucky Dragon has admitted to
conduct that violates the Act, Arifatmi has not shown that Lucky Dragon

16

R. Doc. 11-1 at 9.

knew at the time that this conduct was unlawful. See Ikossi-Anastasiou v.
Bd. of Supervisors of La. Stat Univ., 579 F.3d 546, 553 & n.24 (5th Cir. 2009)
(distinguishing between employer’s knowledge that its pay scale is unfair and
knowledge that its pay scale is illegal).
Further, Iva Octavia, co-owner of Lucky Dragon, declares in an
affidavit that she thought paying Arifatmi only in tips complied with the Act
because Arifatmi had not obtained the proper work authorization from the
Government. 17

As noted, a “good faith but incorrect assumption” of

compliance—even an unreasonable one—is insufficient to prove an employer
willfully violated the Act. See Johnson v. Big Lots Stores, Inc., 604 F. Supp.
2d 903, 924 (E.D. La. 2009) (collecting cases). Because resolution of this
factual dispute turns on the witness’s credibility, summary judgment is not
warranted on this point. See U.S. Fid. & Guar. Co. v. Planters Bank & Trust
Co., 77 F.3d 863, 865 (5th Cir. 1996) (allowing the court in a nonjury case to
draw inferences from summary judgment evidence so long as “there are no
issues of witness credibility”).

Because the employer’s willfulness

“determines the duration of time for which compensation is recoverable,”

17

R. Doc. 14-2 at 1-2.

summary judgment is also unwarranted on the issue of damages. See Saizan
v. Delta Concrete Prods. Co., Inc., 448 F.3d 795, 801 n.31 (5th Cir. 2006).

IV.

CONCLUSION
For the foregoing reasons, the Court GRANTS IN PART and DENIES

IN PART Arifatmi’s Motion for Summary Judgment against Defendant
Lucky Dragon, LLC d/b/a Geisha Sushi Bistro.

11th
New Orleans, Louisiana, this ___ day of April, 2016.

____________________________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE