Melgar Morataya v. Nancy's Kitchen of Silver Spring, Inc. et al

Filing 78

MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 5/20/2016. (kw2s, Deputy Clerk)

Download PDF
FILED U.S. DIS TRICr COURT IN THE UNITED STATES ()JSTRICT COD!R1HiCr OF HARYLAlW FOR THE DISTRICT COURT OF MARYLAND CLERK'S OFFIC~~ * .JESSICA MARLENE MORATAYA, AT Ci\~::: :ECLi MELGAR RY * Plaintiff, A q: 52 ZOlb HAY 20 SO/llhemDiI'isioll ._.~ ;- f j,:-": * Case Nil.: G.JH-I3-01888 v. * NANCY'S KITCHEN OF SILVER SPRING, INC., et aI., * Dcfendan ts. * * * * * * * * * MEMORANDUM Plaintifl: Jessica Marlene Melgar Morataya against Defendants Nancy's "Defendants") ("Plaintiff' for purported ("FLSA"). ~ 201 el seq" the Maryland * or "Morataya"). violations Kitchen") I on in favor of the in the amount of $66.571.18. BACKGROUND and amended her Complaint on July 1.2013. for summary judgment. 1 Defendant's dismissed Act Md. Code. A two-day bench trial \\as conducted Plaintiff initiated this aetion with the tiling of a Complaint motions and Roy G. Wage Payment and Collection October 26 and 27. 2015. For the reasons that follow. the Court enters judgment I. filed this lawsuit Wage and Hour Law ("MWIIL"). Law (ooMWPCL"). Md. Code. LE ~ 3-501 el seq. * of the Fair Labor Standards Lab. & EmpJ. Article (OoLE") ~ 3-401 el seq" and the Maryland Plaintiff and awards damages * OPINION Kitchen of Silver Spring. Inc. ("Nancy's Barreto (collectively. 29 V.S.c. * * wife. Yanda L. Barreto. lOCI' NO.4. The Court has previously which narrowed was also included from the actioll by the COllrt. ECF No. ~~. on June 27. 2013. lOCI' No. I. the issues fiJI' trial. In its January as a defendant in the initial Complaint ruled on two 12.2015 but was later * Memorandum Opinion. thc Court ruled that: Dcfcndant Yanda L. Barrcto was not Plaintiffs employer and was thus dismissed Irom the case as a defcndant: Nancy's Kitchen was propcrly classified as an cnterprise cngagcd in commerce in 2012 and 2013 fiJr purposes ofthc FLSA: Defendants werc not cntitlcd to a ..tip credit" as an offset against thcir minimum wage and overtime obligations under the FLSA; and. Roy Barreto was Plaintilrs cmploycr. ECF No. 44. The Court's July 7, 2015 Mcmorandulll Opinion furthcr narrowed thc ..tip crcdit". issue and found that Defcndants' paymcnt methods. including the weekly cash paymcnts. violated thc FLSA's minimum wage rcquircmcnts f())" tipped cmployees and that Dcfcndants arc. therefore. responsible for paying Plaintiff minimum. and potentially. ovcrtimc wagcs. ECF No. 56. The following issues werc leli to be rcsolved at trial: (I) thc number of hours workcd by Plaintiff during the relcvant periods and thc amount of wages paid by Defendants for thc hours worked during those pcriods; (2) whcthcr Plaintiff is entitled to liquidated damagcs under 29 lJ.S.c. ~ 216(b); and, (3) whcther Plainti ITis cntitled to cnhanccd damages undcr Md. Codc Ann .. Empl. Art., ~ 3-507.I(b). The tirst issue is a fact-bascd determination and thus will be primarily addressed in the Court's Findings of Fact. The sccond and third issues require both fact-linding and conclusions oflaw and will bc primarily addresscd in thc Court's Conclusions of Law. II. FINDINGS OF FACT The Court heard testimony li'Oln both I'lainitff Moralaya and Dcfendant Barreto. Defendants called two additional witnesscs: Angelo Gonsalves. who prcscntcd inl<mnation in chart 1'01111 that had becn provided to him by Barrcto: and John Fernandes. a wailcr at Nancy's Kitchcn. who at the time of trial. remaincd employcd by Barrcto. Although the rcspectivc tcstimonics of Gonsalves and Fernandes were helpful to the Court. thc corc issucs are I<llllldin the disputes between the testimony of Morataya and Barrclo. Morataya testified that shc began employment at Naney's Kitchen on October n. 2007 and worked there until July 7. 2013. She began as a busser before becoming a waitress on March 12.2011. As a busscr. she was paid $7.25 per hour. She testilied that. as a busser. she \\mkcd between 58-64 hours per week. spread out over 6 or 7 days per wcek. but was only paid li)r 40 hours per week regardless of the hours she worked. When she became a waitress in March 2011. her hourly wage was changed to $4 per hour. Morataya was told by Barreto that she could keep her own tips when she was the only person working on the floor but. when she \\"as not. the tips she received were to be placed in a bag so that they could be shared between her. Fernandes. and Barreto. She received pay envelopes once per week with cash. which constituted the weekly cash payment for tips received: and a paycheck in an envelope every other week. which included a mix of cash and checks for her hourly wages. The weekly cash payments for tips were paid at a nat rate 01'$45 per day regardless of the tips actually reeeived.~ That amount was raised to $50 per day on May 2. 2012. Her hours nuctuated during her employment there. From thc time she became a waitress on March 12. 2011 until she began going to school on May 2. 20 II. she worked approximately 63.25 hours per week. From the time she began school until the time she left her employment at Nancy's Kitchen on July 7. 2013. Morataya worked approximately 57 hours per week. Barreto testified that he has operated Naney's Kitchen sinec 1998. As thc owncr. he does scheduling. payroll. deliveries. waiting. cooking. washing. and ""\\hatever it takes to get the place going:- He testified that he hired Morataya in 2007 and began paying her wagcs primarily in Although Barreto (and his counsel) attempted to avoid the consequences ornn earlier ruling orthe Court by rt,.'characterizing these \veekly cash paY'lllcnts as something other than money stelllming from lhe lips camed by Nancy Kitchen employees. the Court tinds that these payments constitute the tips that were the subject of both ECF Nos."'''' and 56. Thus. having previously found that Defendants did not comply with the requirements under FLSA for receiving a "tip credit"" against O\\'ed wages. the Court will not permit Defendants 10 use Illest' payments as otTsets 2 against their minimum wage and overtime obligations. , .) cash, at her request, in 2009. In 20 IO. hc hcgan paying her partially hy check. He denied that Morataya's job c1assilication ever changed from busseI' to waitress or scrver. In response to questioning from Morataya's counsel. he claimed that he did not "understand ,,'hat is a waitress and what is a scrver." He tcstitied that evcryonc. including him. did thc same joh. Hc claimed that it was difficult to teach Morataya how to perform new tasks hecause her English was limited. Barreto testitied that he paid hcr $7.25 per hour in 2010 and that she was paid $8 per hour Irom 2011-2013. He stated that reterences to $4 an hour on the pay envelopes entered into evidence referred to a "halt:llOurly" rate because Morataya wanted to he paid half in cash and half in check. Although. in a sworn affidavit. he previously referred to an "hourly ,,'agc" of $4 per hour and to the weekly cash payments as "tips:' at trial. he testified that thc wcekly cash payments were part of her hourly wages leading to a total of $8 per hour. He acknowledges that he did not have records regarding Morataya' s hours worked. other than I()r 2013. and claims that they were originally kept on thermal paper. which faded and were eventually discarded. Thc Court does not credit Barreto's testimony. First. Barreto testified that he paid Morataya an hourly wage of $8 beginning in March 20 II. which would be above minimum wage. Yet, no document. other than a chart prepared for the purposes of litigation. supported this assertion. To thc contrary. however. the payment cnvelopes retained hy Morataya. in which she received her wages. indicate clearly that she was being paid $4 or. at timcs. $4.15 pCI'hour. The envelopes were filled out by Barreto's witC. who typically provided the paymcnts to the employees. Specifically. a number of the envelopes stated the hours \\,(lrked. t()lIowed by ,,@ 4.15" or •.@ 4," followed by a number that retlectcd the hours workcd multiplied by 4.15 or 4. Other envelopes rctlect a number of hours heing suhtracted by a smaller number. which the parties agreed was the portion of the total hours being paid by check. followed by "@4" and then 4 a number equaling the number of hours not being paid by eheck multiplied by 4. The only other source of payment made by Nancy's Kitchen to Morataya was the weekly cash payments. which the Court has already found was payment for tips collected and not hourly wages. Thus. not only is Barreto's testimony regarding an $8 per hour payment not supported. it is directly reluted. The Court finds. therefore. that Barreto was untruthful on this point and merely attempted to reconstitute the weekly cash payment. which he had previously stated was payment lor tips. as a part of her hourly wage. as a result of the Court's prior ruIing that those weekly cash payments would not be allowed as an offset against wages owed because of his failure to comply with the FLSA requirements for payment of tips. Additionally. Ban'eto repeatedly denied that Morataya's duties ever changed significantly from when she was hired as a busseI'. that she never assumed the role of"sen'er" or "wailer:' and claimed to not understand what those words meant. The Court had the opportunity to observe Barreto's testimony and while there were times when it became apparent that therc were limitations to his English. it is simply not credible that he did not know what these words mean. Indeed, in his deposition testimony. he repeatedly acknowledged that Morataya was a waitress. It is also significant that it is the DeICndants' failure to keep and maintain records for all relevant years that requircs the Court to rely on oral testimony to establish the hours worked. Although a limited number of payroll documents and time sheets were maintained and admitted into evidence, most werc destroyed. An employer "has a duty to keep proper and accurate records of the employee' s wages. hours. and other conditions and practices of employment" McFeeley v. Jacksol7 5/. E11Im'/. LLC. 47 F. Supp. 3d 260. 276 (D. Md. 2014) (citing /)o/7(J\'(m Ken/wood De\'. Co .. fnc .. 549 F. Supp. 480. 485 (D. Md. 1982)). Thus. while Plaintilr"carries the burden of proof in an FLSA claim for overtime wages." Randolflh 5 \'. 1'00l'erCOml11COl7s/,... 1'. [nc., 309 F.R.D. 349. 362 (D. Md. 2015) (citingAl7<lersol1 680.68687.66 \'. MI. Clemem ['011"1)" Co .. 328 U.S. S. Ct 1187.90 l.. Ed. 1515 (1946». the "hurden is light. especially when the employer's records are inaccurate or inadequate:' trl. Three witnesses. Morataya. Barreto. and Fernandes. testilicd to thcir recollection of Morataya's schedule. They dirtered by varying degrces. These differences are not unimportant as, for example. the difference between whether she was seheduled to begin at 7am or 8am on a given day. multiplied over the course of multiple years. signilicantly changes the damage calculation. As indicated. the Court docs not credit Barreto' s vcrsion of evcnts and thus will not engage in a lengthy recitation of his recollection of her schedule. which was sometimes internally inconsistent. Fernandes's recollection differed slightly from Morataya but the Court finds Morataya credible and finds her to be a more rcliable source than Fernandes regarding her own schedule. For these reasons. the Court credits Morataya's testimony regarding her hours worked and payments received] But even this linding leaves some uncertainty as there \vere. of course. periods of lluctuation. Indeed. as counsel for defense pointed out in closings. the relatively lew timesheets available to the Court show lluetuations in hours and Morataya testilied to occasional days off. albeit few. as well as days where she worked additional hours to provide coverage for Fernandes or Barreto. With these potential fluctuations in mind. the Court finds that Morataya worked. on average. 62 hours per week from the date she was hired on June 27. 20 10 until she became a waitress on March 12. 201 I; 63 hours per week hetween March 12. 20 l I and May 2. 2011 when she began school: and 57 hours per week between May 2.2011 and "hen her employment ended on July 13.2013. The Court further tinds that she only reccived payment for Portions of Gonsalves's summary ofpaymcllts the Court in making its tindings. J made 10 Morataya arc not disputed by PlaintitTand are also used by 6 40 hours per week from June 27. 20 10 until March 12. 20 II. Finally. thc Court finds that li'om March 12. 2011 until June 9. 2013. she was paid $4 per hour and Irom Junc 9. 2013 until July 12. 2013. she \Vas paid $4.15 per hOUL III. CONCLUSIONS OF LA W A. Liability The FI.SA requires employers to "pay to each of [their] employees. who. in any workweek. is engaged in commerce or in the production of goods lor commerce. wages at ... $7.25 an hour" and mandates that employers pay their employees at a rate of one and one-half times their rcgular rate f()r hours worked in excess of 40 hours in a given week. 29 206(a)( I) and 207(a)(1): Bli/ier Md. Nov. 7.2013) ("Pursuantto no less than lederalminimum 1'. U.s.c. ~~ Pf'&G. /nc .. No. WMN-13-430. 2013 WI. 5964476. at *6 (D. the FI.SA. an employcr must pay an employee an hourly wage wage.''). In addition to her FI.SA claim. PlaintilThas also brought claims undcr the MWHL and the MWPCL. Similar to the FI.SA. the MWHI. "requires that employers pay the applicable minimum wage to their cmployees and. in [~~ 3-415 and 3-420 of the Labor and Employmcnt Article]. that they pay an overtime wagc of at least 1.5 times the usual hourly wage" for each hour worked in cxcess of forty hours pcr week. JlcFeeley. 47 F. Supp. 3d at 275 (quoting Friolo I'. Frankel, 373 Md. 501. 513. 819 A.2d 354 (2003» (internal quotation marks omilled).While thc MWHL provides a minimum wagc standard. the MWPCL rcquircs an employer to rcgularly pay its employees while employed and at the termination of employment. LE ~ 3-402. 3-502. 35.5. "Read together. thcse statutes allow cmployees to recover unlawfully withheld wages II'om their employer. and provide an employcc with two m'enucs to do so." Peters \'. Earzl' lIealthcar~ Giver. /nc .. 439 Md. 646. 653. 97 AJd 621. 625 (2014) (citing Ballaglia \'. Clinical 7 Pe,jusiollis/s. Inc .. 338 Md. 352, 364. 658 A.2d 680. 686 (1985». Additionally. the Maryland Court of Appeals has determined that an employee is entitled to sue under both statutes to recover withheld overtime wages. id at 654 ("[B]oth the [MJWHL and the [M]WPCL are vehicles for recovering overtime wages:'). however. at all timcs rclevant to this litigation. the MWHL exempted restaurants from its overtime provisions. Gilmji-iddo \'. link. 769 F. Supp. 2d 880,895 (D. Md. 201 1).~ Based on the above lindings of fact. the Court concludes as a matter of law that Defendants violated the MI IWL by its failure to pay minimum (or any) wages to Morataya beyond the 40 hours per week paid to her from June 27. 2010 untill'vlareh 12.2011 and by paying $4 per hour and then $4.15 per hour ti'OITI arch 13.2011 through July 13.20 J 3. The M Court additionally concludes as a matter of law that the Defendants violated the FLSA by not paying minimum and overtime wages from January J. 2012 through July 13.2013.; Stillleti for the Court's determination is whether the Plaintiff is entitled to liquidated damages under the FLSA and enhanced damages under state law. B. Damages I. Liquidated Damages Under the FLSA Pursuant to the FLSA. an employer who violates minimum wage or overtime requirements "shall be liable to the employee or employees affected in the amount of their unpaid minimum wages. or their unpaid overtime compensation. as the case may be. and in an additional equal amount as liquidated damages:' 29 U.S.c. ~ 216(b). "Liquidated damages arc 4The restaurant exemption was eliminated Ch. 262 (H.B. 295); L.E. ~ 3-~ 15. in the Maryland Minimum Wage Act of20 14. See 2014 Maryland Laws SBecause Plaintiff did not demonstrate that the Defendant earned in excess ofS500.000.00 in gross annual receipts in 2011, as required to state a FLSA claim. she is not entitled to recover under the FLSA forthat year. See 29 U.S.c. S 203(5)( t )(A). 8 not seen as punitive, but as compensation for damagcs othcrwise .too obscure and difficult of proof,''' Rogers \'. Sal'. First MOr/g.. u.c. 362 F. Supp. 2d 624. 637 (D. Md. 2005) (citing Sal'. Bank1'. () 'Neil. 324 U.S. 697. 70708. 65 S. Ct. 895. 89 L. Ed. 1296 (1945). Courts Brooklyn have routinely held that there is a presumption in f~l\'orof an award of Iiquidated damages when it is determined that the employer has violated the FLSA. !d.: seC' also I.an~a 1'. SlIgarlaml Rlln HomeownC'l's Assoc .. Inc .. 97 F. Supp. 2d. 737. 739n.9 (E.D. Va. 20(0). Nonetheless. there are circumstances where liquidated damages are not appropriate: If the employer shows to the satisfaction of the court that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing ihat his act or omission was not a violation of the [FLSAj the court may. in its sound discretion. award no liquidated damages or award any amount thereof not to exceed the amount specified in [29 U.s.c. ~ 216(b)]. Rogers, 362 F. Supp. 2d at 63738. An employer found liable under the FLSA has the "plain and substantial burden of persuading the court by proof that his I~\ilureto obey the statute was both in good faith and predicated upon such reasonable grounds that it wmild be unf~lirto impose upon him more than a compensatory verdict." Wright \'. Carrigg. 275 F.2d 448. 449 (4th Cir. 1960). This burden "is a difficult one to meet ... and double damages arc the norm. single damagcs the exception," Reich \'. S. New Eng. TC'IC'cOIIIIIIS. Corp .. 1:21F.3d 58. 71 (2d Cir. 1997) (citation omitted). Defendants arguc that Barreto's paymcnt of the wcekly cash payments to Morataya demonstrates that he was making an emm. even if improper. at paying hcr minimum wage. They additionally argue that because Barreto told Gonsalves. a ccrtitied CPA. about his payment methods and was not corrccted. that good faith applies. These arguments I~lil.Courts havc bcen consistent in finding that ignorance of the requirements of the FLSA docs not constitutc good faith. Reeves 1'. /111 '/ TC'!.& Tel .. Co. 616 F.2d 1342. 1353 (5th Cir. 1980). cm. 9 dC'nied. 449 U.S. 1077. 101 S. Ct. 857.66 L. Ed. 2d 800 (1981): Williams \'. .lId. Office ReloWlors. HC. 485 F. Supp. 2d 616. 620 (D. Md. 2007): Rogers \'. So\'. Firsl MOrlg. HC. 362 F. Supp. 2d 624. 638 (D. Md. 2005). Indeed. "where a question is complex or uncertain. an employer at the leastmusl show that it made a diligent investigation into the issues and concluded not to pay overtime based upon the results of its investigation:' Rogers. 362 F. Supp. 2d at 638 (superseded by statute on other grounds). There is no evidence that Defendants here made any il1\'estigation into whether their method of payment was appropriate. Thus. they have not shown good lilith and liquidated damages will be awarded. 2. Enhanced Damages Under State Law Although state wage statutes allow for enhanced damages. "a trier of fact 'may not award enhanced damages unless ittinds that the employee's wages were not withheld as a result ofa bona tide dispute ..•• Programmers' COllSorlillm. Inc. \'. Clark. 409 Md. 548. 563. 976 A.2d 290. 299 (2009). A bona tide dispute is "a legitimate dispute over the validity of the claim or the amount that is owing" such that the employer had a good faith basis for withholding payment. Admiral MOrlg.. Inc. v. Cooper. 357 Md. 533. 543: 745 A.2d 1026. 1031 (2000). Although the statute is silent on which party bears the burden of proof on this issue. the Maryland Court of Appeals has placed the burden on the employer to prove the bona tide dispute. I'elers. 439 Md. at 658 ("[Ilt is not difficult to conclude that the employer. as the party withholding the wages. is uniquely qualitied to ot1er evidence about its reason for doing so:) Nonetheless. "an employee is not presumptively entitled to enhanced damages. even if the court finds that wages were withheld without a bona fide dispute:' Id at 661. Rather. trial courts are simply "encouraged to consider the remedial purpose of the [M]WI'CL when deciding whether to award enhanced damages to employees:' /d. The statute does not set a specitied 10 amount of enhanced damages but docs state that "plaintiff may be awarded an amount 'not exceeding three times the wage ...• Marroquin\". Canales. 505 F. Supp. 2d 283. 296 (D. Md. 2007) (citing Admiral Mor/gage. Inc.. 357 Md. at 547: Peters. 439 Md. at 667 ("The total amount of damages an employee may recover under the [M]WPCL is three times the unpaid wage."). The Defendants have not met their burden of demonstrating a bona fide dispute. As stated above, Defendants made no efTort to determine if their method of payment was consistent with controlling law. Thus, for the same reasons the Court concludcd that good faith was not demonstrated for purposes of determining liquidated damages. the Court concludes that there was not a bona tide dispute. Although this docs not compel an award of cnhanced damages. the Court concludes that they are warranted herc. That said. the Court is mindful of the fact that. as even Plaintitrs counsel conceded. in paying the weekly cash paymcnts. Dcfendants did pay Plaintiff an amount that met or excccded what her minimum wage would have been. Although the weekly cash payments cannot be considered lor thc purposes of applying an on~set to the owed minimum or overtime wages. see ECF Nos. 44 and 56. the Court docs lind that. in light of those payments received by Morataya. mercly doubling. rather than tripling. the compensatory damage total is suflieient to serve the remcdial purpose of the statute. 3. Damage Calculations For the thirty-seven week period between June 27. 20 I0 to March 12. 20 II. belorc Morataya became a waitress, the Court finds that she worked 2.294 hours (62 hours per week) but was only paid for 1.480 hours (40 hours per week). Thus. she is owed minimum wage lor 814 hours. Multiplying that figure by the $7.25 she should have recei\'ed for each hour. results in II $5.901.50 that Morataya is owed in compensatory damages under the MIIWL and MWCPL for that time period. For the seven week period I,'om March 12. 20 II through May 2. 20 I I. when she adj usted her hours to accommodate school. Morataya worked 441 hours. For the thirty-live week period from May 2. 2011 until Deccmber 31. 2011. she \\"Orked 1.995 hours. Thus. from May 12.2011 through December 31. 20 II. she worked 2.436 hours. Morataya conccdes she was paid $4 for every hour worked during this period which would mean she was paid $9.744. Had she been paid $7.25 an hour. she would have becn paid $17.661. Thus she is owed the diflercncc. $7.917. under the MHWL and MWCPL for this time period. For thc seventy-four week period 1"0\11 January I. 2012 to June 9. 2013. Morataya worked 4.218 hours. At a rate of$4 per hour. she \\'as paid $16.872. For the live week period from June 9. 2013 until.July 13.2013. when she was paid $4.15 per hour. she worked 285 hours and was paid $1.182.75. Thus 11'0111 January I. 2012 to July 13.2013. she receiwd a total of $18.054.75. Had she been paid $7.25 per hour. she would havc been paid $32.646.75. Thus. she is owed the difference. $14.592. for this time period under the MIIWL. MWCI'L. and FLSJ\. In total. Morataya is owed $28.410.50 in past due minimum wage payments. She will be awarded an equal amount in enhanced damages under the MHWL and MWCI'L and liquidated damages under the FLSJ\ for a total of $56.821." For overtime under the FLSA. the Court linds that Morataya \\orked 4.503 hours from January 1. 2012 through July 13.2013 and that anything over 3.160 constitutes overtime. The Court has already awarded Morataya $9,736.75 fiJr minimum wage payments for those 1.343 times for the same injury. Plaintiff will receive olle payment for each statute violated. ~(";l!/! Clol1(:\' I', S"kylil1l! Crill. 1.1.c.. No. ELH-12-1598. 2012 \VL 5409733. at *5 (D. Md. Nov. 5. 2012). tefloN and 1'(>('o1J1IJ1/!ndatiol1 til/opt!!". No. ELH12-1598.2013 WL 625344 (D. Md. Feb. 19.20 t 3) ("IAI pany may not recover 1\\ ice for one injury. even if the party asserts multiple. consistent theories of recovery. "). b Because Plaintiff is not permitted to recover under all applicable I11Ultiple statutes and not a separate payment 12 hours. Paid at $10.88 for those hours, her payment would be $14,611.84. She is owed the difference, $4,875.09 in overtime compensation. Including liquidated damages. the payment under FLSA is $9,750.18. Total judgment for the Plaintiff is $66.571.18. IV. CONCLUSION For the foregoing reasons, Judgement in favor of the Plaintiff is entered in the amount of $66,571.18. A separate Order shall issue. Dated: May),Q 2016 GEORGE J. HAZEL United States District Judge 13

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.


Why Is My Information Online?