Vajic v. API Restaurant Corp. et al

Filing 24

OPINION re: 17 MOTION to Dismiss Amended Complaint filed by SETA Restaurant Corp., Antonio Spiridigliozzi, PIO Restaurant, LLC, Giovanni Apicella, API Restaurant Corp., Cella Fine Foods Inc. Based on the conclusions set forth above, Defendants motion to dismiss is granted in part and denied part. Leave to replead within twenty days is granted. (Signed by Judge Robert W. Sweet on 7/18/2012) (lmb)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

-x
DANIEL SLAMNA and MIROSLAV VAJIC,
individually and on behalf of
1 other
similarly situated,
Plaintiffs,

12 Civ. 757(RWS)
OPINION

-against
API RESTAURANT CORP., CELLA FINE FOODS
INC., PIO RESTAURANT, LLC, SETA
RESTAURANT CORP., GIOVANNI APICELLA and
ANTONIO SPIRIDIGLIOZZI, joint
and
severally,
Defendants.

A P PEA RAN C E S:
Att

aintiffs

THE LAW OFFICE OF JUSTIN A. ZELLER, P.C.

277 Broadway, Suite 408

New York, NY 10007

By: Justin Alexander Zeller, Esq.

Brandon David Sherr, Esq.

At

for Defendants

MILMAN LABUDA LAW GROUP, PLLC

3000 Marcus Avenue, Suite 3W8

Lake Success, NY 11042

By: Netanel Newberger, Esq.

Joseph Martin Labuda, Esq.
Richard I. Milman, Esq.

Sweet, D.J.

Defendants API Restaurant Corp.
Foods Inc.

("APIU)

I

Cella Fine

("Cella U), pio Restaurant, LLC ("Pio U), Seta

Restaurant Corp.

(" Seta" ), Giovanni

Antonio Spiridigl

icella ("Apicella") and

zzi ("Spiridigliozzi," and, collectively, the

"Defendants") have moved pursuant to Rule 12(b) (6) of the
Federal Rules of Civil Procedure to dismiss the amended
complaint (the "Amended Complaint")
( "Vaj

1/)

and

I Slamna ("Slamna U

the Fair Labor Standards Act
( "NYLL" ) .

Plaintiffs Miroslav Vajic
)

alleging violations of

("FLSA") and the New York Labor Law

Based upon the conclusions set forth below,

Defendants! motion to dismiss is

ed in part and denied in

part.

Prior Proceedings

On January 31, 2012, Vajic filed an initial complaint
against Defendants.

After several stipulations of adjournment

extending Defendants! time to answer the complaint, Defendants
moved to

smiss the complaint on April 27, 2012.

The motion to

dismiss was marked returnable on May 23, but on May 18,

Plaintiffs filed the Amended Complaint.
Complaint, Defendants withdrew t

In light of the Amended

ir motion to dismiss.

On June 4, 2012, Defendants filed the present motion
to dismiss the Amended Complaint.

The motion was marked fully

submitted on June 27.

The Amended Complaint

The Amended Complaint alleges the following facts,
whi

are accepted as true at this stage of the litigation.

Defendants operate a group of four restaurants in New York:
Azalea Ristorante, at 224 West 51 st Street; Amarone Ristorante,
at 686 Ninth Avenuej Luna P

Ristorante, at 243 East 53 rd

Street; and Tramonti Ristorante, at 364 West 46 th Street.
four bus

The

and Seta - are

s defendants

alleged to be the owners of these restaurants, and Apicella and
Spiridigliozzi are alleged to own these four businesses.
Apicella and

iridigliozzi active

participated in the

business of Defendants and exercised substant

I control over

the functions of Defendants' employees, including PIa
Defendants have a single website to advertise t

2

four

iffs.

restaurants, and the owners have moved

employees' work

location and responsibilities from one restaurant to another.

Amended Complaint

leges that,

from approximately

April 25, 2011 to approximately February 16, 2012, Defendants
employed Slamna.

Slamna was employed as a waiter at Azalea

storante, and he was compensated at an hourly rate of $5.00.
Slamna's paychecks bear API's name.

From approximately February

2, 2008 to December 2, 2011, Defendants employed Vajic.

Vajic

was employed as a waiter at Tramonti Ristorante, and he was
compensated at hourly rates ranging from $4.60 to $5.00.
Vajic's paychecks bear Cella's name.

Defendants never informed

Vajic that Defendants intended to use a tip allowance.

Plaintiffs contend that they worked between 44 and 47
hours per week.

Defendants failed to pay Plaintiffs and other

employees for many of the hours they worked, and Plaintiffs and
other similarly situated employees were paid less than the
applicable minimum wage for the hours worked.
Amended Complaint, notwithstanding t

According to the

fact that Plaintiffs

worked in excess of 40 hours per week, Defendants failed to pay
aintiffs and other similarly situated employees overtime
compensation of one and one-half times the applicable minimum
3

wage.

Additionally, while Defendants employed Plaintiffs,

Defendants fai

to mainta

accurate and sufficient time

records.

Pursuant to 29 U.S.C.

§

207, Plaintiffs seek to

prosecute their FLSA claims as a collective action on behalf of
I persons who are or were formerly employed by Defendants at
any time since three years prior to the date of the filing
their compl

nt up until t

entry of judgment in this case, who

were non exempt employees within the meaning of the FLSA and who
were not paid minimum wage or overtime compensation.

The Amended Complaint asserts two causes of action,
one all

ing violations of the FLSA and the other alleging

violations of the NYLL.

Plaintiffs seek designation of this

action as a collective action, a declaratory judgment that the
practices complained of are unlawful under the FLSA and NYLL, an
award of unpaid minimum wage and overtime compensation, an award
of liquidated damages as a result of Defendants' failure to pay
minimum wage and overtime compensation, an award of pre-judgment
and post-judgment interest and an award of costs, expenses and
attorneys' fees.

4

The Applicable Standard

On a motion to dismiss pursuant to Rule 12, all
factual allegations in the comp

int are accepted as true, and

1 inferences are drawn in favor of the pleader.
Polar Molecular

Mills v.

.,12 F.3d 1170,1174 (2d Cir. 1993).

-~------------------~~

The

issue "is not whether a plaintiff will ultimately prevail but
whether the claimant is entitled to offer evidence to support
the claims."
375, 378

viII

Inc. v. Town of Darien, 56 F.3d

(2d Cir. 1995).

To survive a motion to dismiss pursuant to Rule
12 (b) (6),

"a complaint must conta

sufficient factual matter,

accepted as true, to 'state a claim to relief that is plausible

_

_

_____

_

(quoting Bell Atl
~

1937,173 L.Ed.2d 868 (2009)

,556 U.S. 662, 678, 129 S.Ct.
______

~

on its face.'" Ashcroft v. I

_ _ _ _ _ _ _ _ _ _ _ __ L

550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007))

Plaintiffs must all

sufficient facts to "nudge [ ] their

claims across the line from conceivable to plausible."

550 U.S. at 570.

Though the court must accept the factual

allegations of a complaint as true, it is "not bound to accept

as true a legal conclusion couched as a factual all
-----"'-­

, 556 U.S. at 678 (quoting

Tw~mbly,

5

ion. "

550 U.S. at 555).

Defendants' Motion To Dismiss The Amended Complaint Is Granted
In Part And Denied In Part

According to Defendants, the Amended Complaint should
be di

ssed because Plaintiffs fail to allege facts sufficient

to establish that Defendants "employed" them as that term is
FLSA.

defined in

Defendants

so contend that joi

of

Plaintiffs' claims should not be permitted because the claims do
not arise out of the same transaction or occurrence.

F

ly,

Defendants contend that pilot Project Regarding Case Management
Techniques for Complex Civil Cases in the Southern District of
New York demands that the Amended Compl

nt be dismissed with

prejudice.

A. The Amended Complaint Alleges Sufficient Facts Establishing
API, Cella, Apicella And Spiridigliozzi To Have "Employed"
Plaintiffs; Plaintiffs Fail To State A Claim Against Pio
And Seta

"To be held liable under the FLSA, a person must be an
'employer,' which
person acting

§

rect

3(d) of the statute defines broadly as 'any
or indirectly in

employer in relation to an employee.

1/1

interest of an
Herman v. RSR Sec.

Servs. Ltd., 172 F.3d 132, 139 (2d Cir. 1999)
6

(quoting 29 U.S.C.

§ 203(d)).

The

finitions

"employer" and "employee" under

FLSA are "strikingly br[oadJ," "stretch[
I

employee

J the meaning of

to cover some parties who might not qualify as such

I

under a st

ct application of traditional agency law

nciples."

Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318,

326, 112 S.Ct. 1344, 117 L.Ed.2d 581

(1992).

This is done"

remedial purposes of

order to effectuate

act."

Barfield

v. N.Y. Ci
Health &
., 537 F.3d 132, 141 (2d Cir.
------------~--------------~----~~
2008).

Thus, an "employer" under t

entity for whi
individual princ

FLSA is not just the

the employee works, but can also be an
or manager of t

entity.

See Herman,

172

F.3d at 140.

an employer as one who "suffer[s] or

The FLSA def

permit [s]" an employee to work.

29 U.S.C.

§

203(g).

Courts are

to look to "economic reality rather than technical concepts U to
ground their decisions regarding whet
falls under the
141 (citing

finition

a person or entity

"employer.u

Barfield, 537 F.3d at

~G_o_l_~__~~v_.__W_i~t_a_k_e r H_o_u_s_e
__
h
_ ___
_____ .~.__
I_n_c_.~,

33, 81 S.Ct. 933, 6 L.Ed.2d 100 (1961))
include whether the alleged employer:
fire the employees,

366 U.S. 28,

Relevant factors

(1) had the power to hire

(2) supervised and controlled employee

work schedules or conditions of employment,
7

(3)

ermined the

rate and method of payment, and (4) maintained employment
H~rman,

records.
Communi
------...

~~------~~

172 F.3d at 139 (citing Carter v. Dutchess
, 735 F.2d 8, 12

the four factors standing alone is

(2d Cir. 1984)).

"No one of

spositive.

. Instead,

the 'economic reality' test encompasses the totality of
circumstances, no one of which is exclusive./I

Id.

The economic

realities test is applicable to both FLSA and NYLL claims.
Fl

v. Vulcan Power

L.L.C.,

------~---~---------------------~~------~

See

712 F. Supp. 2d 63, 69

(S.D.N.Y. 2010).

" [I]ndividual officers, directors, and executives of
an entity may constitute 'employers' of an employee if they
possessed the power to control him or her."
Care Servs.,

-_...

*7

..

Inc., No. 10-CV-5530

(E.D.N.Y. Feb. 21, 2012).

Wilk v. VIP Health

(ILG) (JMA), 2012 WL 560738, at

"The overwhelming weight of

authority is that a corporate officer with operational control
of a corporation's covered enterprise is an employer along with
the corporation,
unpaid wages."
2002)

jo

ly and severally liable under the FLSA for

Moon v. Kwon, 248 F. Supp. 2d 201, 237

(quoting Donovan v.

, 712 F.2d 1509, 1511

1983) )

8

(S.D.N.Y.

(1st Cir.

"The regulations promul

ed under the FLSA expressly

recognize that a worker may be employed by more than one entity
at the same time."
66 (2d Cir. 2003)

~~ ___~________~~~___l _C~o .,
_ __

(citing 29 C.F.R.

§

791.2).

355 F.3d 61,

To determine if

an entity is, as a functional matter, a joint employer for the
purposes of the FLSA,

"[tJhe Second Circuit has declined to

circumscribe [a court's] analysis to a precise set of factors,
recognizing up to ten common factors while noting that a
district court

lS

'free to consider any other factors it deems

relevant to its assessment of the economic realities.'ff
Great Rose Fashion,
*12

In~,

Lin v.

No. 08 CV 4778, 2009 WL 1544749, at

(E.D.N.Y. June 3, 2009)

(quoting

----~

, 355 F.3d at 71-72)

i

accord Herman, 172 F.3d at 139 ("[A]ny relevant evidence may be
examined so as to avoid having the test confined to a narrow
legalistic definition.") .

Second Circuit, while noting that this list is not
exhaustive, has provided some factors for a

strict court to

consider in applying the economic realities test, including (1)
whether the alleged employer's premises and equipment were us
for plaintiffs' work,

(2) whether plaintiffs shift

from one

putative joint employer's premises to that of another,

(3) the

extent to which the work performed by plaintiffs was integral to

9

the ove

1 business operat

(4)

whether plaintiffs' work

responsibilities remained the same regardless of where they
worked,

(5) the degree to which the alleged employer or its

agents supervised plaintiffs' work and (6) whether plaintiffs
worked exclusively or predominantly for one defendant.
~~~

I

See

355 F.3d at 72.

The Department of Labor's regulations regarding joint
employment provide additional guidance.
situations where

~a

They identify some

joint employment relationship generally will

be considered to exist."

29 C.F.R.

§

791.2(b).

These

situations are:

(1) Where there is an arrangement between the employers to
share the employee's services, as, for example, to
interchange employeesj or
(2) Where one employer is acting directly or indirectly in
the interest of the other emp
(or employers)
relation to the employee; or
(3) Where the employers are not
with respect to the employment of
may
deemed to share control of
indirectly, by reason of the fact
controls, is controlled by, or is
the other employer.

Id.

10

etely
sassociated
a particular employee and
the employee, directly or
that one employer
under common control with

While

PI

ntiffs have alleged sufficient facts

establishing API, Cella, Apicella and Spiridigliozzi to be
"employers," the Amended Compl
against Pio and Seta.

nt fails to state a claim

The Amended Complaint alleges that

Defendants operate a group of four restaurants, Am. Compl.

~

14,

that each restaurant is owned by one of the four defendant
businesses, Am. Compl.
are owned by Api

~

15, that the four defendant businesses

la and Spiri

gliozzi, Am. Compl.

~

16, that

Apicella and Spiridigliozzi exercised substantial control over
the functions of the restaurant employees, Am. Compl.

~~

17 18,

that Defendants have a single website to advertise the four
restaurants, Am. Compl.
empl

work location

I

~

19, and that the owners have moved
respons
~

restaurant to another, Am. Compl.

lities from one
20.

The Amended Compla

alleges that Slamna worked at Azalea Ristorante and was paid by
API, Am. Compl.

~~

22, 24, and that Vajic worked at Tramonti

storante and was paid by Cella, Am. Compl.

~,

26, 28.

With respect to API and Cella, the facts alleged in
the Amended Complaint, including that API paid Slamna and that
Cella paid Vajic, suggest the "economic reality" that these two
defendants employed Plaintiffs.
allegations

The Amended Complaint's

so establish that Apicella and Spiridigl
11

zzi,

through their ownership and involvement in the management of API
and Cella, possessed the power to control Plaintiffs l thus
est

ishing

ir status as employers.

As such, Defendants'

motion to dismiss the Amended Complaint with respect to API
Cella l Ap

lla and

I

iridigliozzi is denied.

With respect to Pio and Seta, the analysis is less
straight-forward.
of the

aintiffs have alleged facts meeting several

the Second Circuit described in

Amended Complaint alleges that the putat
including Slamna and Vajic,
putative pIa

----~

, as t

plaintiffs l

Defendants' premises l that the

iffsl labor was shifted by Defendants among the

four restaurants and that Api

la and Spiridigliozzi supervised

and exercised control over the putative pI

iffs.

alleged

facts also satisfy the Department of Labor's regulations, as
Amended Complaint alleges an arrangement to share employees'
services and a scheme under which employers

by means of common

I

control, may be deemed to share control of employees.

However,

the Amended Complaint fails to identify a specific plaintiff who
was employed

Pio or Seta.

Nakahata v. N.Y. Pre

As suchl this case is analogous to

erian Healthcare

'1

~~~~~~--~~~ ....-~~~~~-----------~---------~--

2661, 2662, 2683

1

3247, 2011 WL 321186

(S.D.N.Y. Jan. 28, 2011)

a case where the Court considered motions to di
12

Nos. 10 Civ.

ss four

I

related complaints alleging that the defendants had violated the
FLSA and NYLL.
compl

In Nakahata, the Court dismissed the plaintiffs'

s, noting that

[t]here are no factual allegations about when
leged
unpaid wages were earned.
., or the number of hours
allegedly worked without compensation-t
heart of the
claim. Nor do they allege any specific facts about the
plaintiffs' employment, such as their dates of employment,
pay, or positions.
It should go without saying that the
defendant in FLSA and NYLL claims must be the plaintiff's
employer. The compl nts are deficient due to the fai
to specify whi
entity, among the many named
fendants,
employed the respect
plaintiffs. Certainly if one
entity
d not pay an employee for overtime, that is an
insufficient basis for naming every ot r heal
care
facility affiliated
th the employer.

Nakahata,
-_._-­

2011 WL 321186, at *4.

Similarly, in this case,

Plaintiffs provide no factual allegations concerning FLSA or
NYLL violations on the part of pio or Seta.

There are no

allegations that Pio or Seta ever employed

aintiffs, and the

Nakahata Court's reasoning that if one entity did not pay an
employee for overtime, that is an insufficient basis

r holding

1 affiliated entities liable seems equally applicable to this

case.

Although the Amended Complaint presents some facts
ationship amongst

indicative of a joint employment
13

six

Defendants, the closest Plaintiffs come to identifying the
involvement of P

and Seta is the conclusory statement,

"

owners have moved employees' work location and responsibilities
from one restaurant to another."

Am. Compl.

~~

20.

Without

providing additional information, Plaintiffs have failed to
allege sufficient facts establishing the "economic reality" that
Pio and Seta employed PIa
employment relationship.

if

,either directly or in a joint

Accordingly, Plaintiffs claims against

Pio and Seta are dismis

B. Defendants' Contentions Concerning Misjoinder Cannot Be
Addressed On A Motion To Dismiss

Defendants,

their motion to dismiss pursuant to

Fed. R. Civ. P. 12 (b) (6), contend that PI

ntiffs

il to meet

the standard set forth in Fed. R. Civ. P. 20 for permissive
joinder

parties.

"As an initial matter, dismiss

of this

action is not the appropriate remedy for misjoinder under
Federal Rule of Civil Procedure 20; inst
remedy is severance."
Lit

appropriate

In re Adult Film

., No. 11 civ. 7564, 2012 WL 1003581, at *2

(citing Fed. R.

Civ. P. 20; Fed. R. Civ. P. 21; Arista Records LLC v. Does 1-16,
No. 08 Civ. 765, 2009 WL 414060, at *8 (N.D.N.Y. Feb. 18,
2009)).

"Mi

oinder of parties is not a ground
14

dismissing

an action."

Fed. R. C

. P. 21.

Because Defendants'

contentions concerning misjoinder are inartfully pled
Fed. R. Civ. P. 12 (b) (6) motion, they are deni

this

without

prejudice.

C. Plaintiffs Are Granted Leave To Replead

According to Defendants, pursuant to

Pilot Project

Regarding Case Management Techniques for Complex Civil Cases in
the Southern District of New York (the "Pilot Project"), a
aintiff has one opportunity to amend the compl
amended complaint is dismis
complaint with prej
tial mot
fil

ceo

nt, and if the

, the Court should dismiss
Defendants note that t

filed their

to dismiss on April 27, 2012 and that Plaintiffs

their opposition on May 11.

ly, Plaintiffs filed the

Defendants submitted their
Amended Complaint.

However, on May 18, the same

Defendants contend that,

accordance with

the Pilot Project, the Amended Complaint should be construed as
Plaintiffs' final opportunity to amend their pleadings.

Defendants' claim that this action is within the Pilot
ect is without merit.

Pursuant to the order of the

Honorable Loretta A. Preska dated October 31, 2011, a case is
15

ignated for inclusion in the Pilot Project if "it is a class
action, an MDL action, or is in one of the following Nature of
Suit categories: 160, 245, 315, 355, 365, 385, 410, 830, 840,
850, 893, or 950."
for

In re Pilot

ect Re Case

ex Civil Cases, No. 11 Misc. 388,

31, 2011).

~

s

2 (S.D.N.Y. Oct.

This action is not a class action or multidistrict

litigation, and its "nature of suit" category

Labor: Fair

Standards (710) - is not a category included in the Pilot
Project.

though Defendants contend that because the Amended

Complaint asserts the requisite elements for class certification
it should be treated as a class action, the fact remains that
this action is not included under Chief Judge Preska's October
31 order, and this Court never issued an order directing the
parties to comply with the pilot Project's terms.

"It is

usual practice upon granting a motion to

dismiss to allow leave to replead."
Fed. Appx. 17, 19 (2d Cir. 2007)
Sum

L.P.,

------------~-----

(cit

949 F.2d 42, 48

Plaintiff is granted leave to rep1

Conclusion

16

Schindler v. French, 232
Cortec Indus., Inc. v.

(2d eir. 1991)).

Accordingly,

within twenty days.

Based on the conclusions set forth above, Defendants
motion to dismiss is granted in part and denied

part.

to replead within twenty days is granted.

It is so ordered.

New York, NY
July

/5'

2012

~I

tf~.~~ET
U.S.D.J.

17

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