Espinobarros Apolinar et al v. R.J. 49 REST., LLC et al
Filing
76
OPINION & ORDER re: 59 MOTION to Dismiss Amended Complaint. filed by R J 51, INC., N.J. 52 Inc., Susan Kim, 62 MOTION to Certify Class Conditional Certificiation of Collective under the FLSA. filed by Gil Espinobar ros Apolinar, Delfino Felix Vargas. For the reasons set forth above, it is hereby ORDERED that defendants R.J. 51 Inc.'s, N.J. 52 Inc.'s and Susan Kim's motion to dismiss is GRANTED. The Court also dismisses, sua sponte, defendants Elliot Lee, Raymond Kim, John Doe Corporation d/b/a Toasties, Ark 48th Corp. d/b/a Toasties, 924 Third Ave. Deli, Inc. d/b/a Toasties, Toasties One Corp. d/b/a Toasties, Toasties Deli Corp. d/b/a Toasties, and CCKO, Inc. d/b/a Toasties due to plain tiffs' failure to timely serve them. It is further ORDERED that plaintiffs' motion for conditional certification of a collective action is GRANTED IN PART. As set forth in this Opinion & Order, the parties shall meet and confer regarding the terms of plaintiffs' proposed notice and present any remaining issues to the Court not later than June 6, 2016. The Clerk of Court is directed to close the motions at ECF Nos. 59 and 62. (As further set forth in this order), CCKO, Inc., John Doe Corporation, Raymond Kim, Susan Kim, Elliot Lee, N.J. 52 Inc., R J 51, INC., Toasties Deli Corp, Toasties One Corp, 924 Third Ave. Deli, Inc. and Ark 48th Corp terminated. (Signed by Judge Katherine B. Forrest on 5/18/2016) (lmb)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
---------------------------------------------------------------------- X
:
GIL ESPINOBARROS APOLINAR and DELFINO :
FELIX VARGAS, individually and on behalf of
:
others similarly situated,
:
:
Plaintiffs,
:
:
-v:
:
R.J. 49 REST., LLC, et al.,
:
:
Defendants.
:
:
---------------------------------------------------------------------- X
KATHERINE B. FORREST, District Judge:
USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: May 18, 2016
15-cv-8655 (KBF)
OPINION & ORDER
Plaintiffs Gil Espinobarros Apolinar (“Apolinar”) and Delfino Felix Vargas
(“Vargas”), on behalf of themselves and others similarly situated, commenced this
action on November 4, 2015 against several corporate defendants and individuals
for alleged violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et
seq., and the New York Labor Law (“NYLL”). Plaintiffs allege that the various
corporate defendants all do business under the name “Toasties” and have engaged
in a number of illegal employment practices including, inter alia, illegally retaining
tips, deducting meals and taking kickbacks. (See Am. Compl., ECF No. 53.)
Pending before the Court are two motions that the Court resolves together in
this decision. The first is a motion to dismiss plaintiffs’ Amended Complaint by
defendants R.J. 51 Inc. (“R.J. 51”), N.J. 52 Inc. (“N.J. 52”) and Susan Kim (the
“Moving Defendants”) pursuant to Rule 12(b)(6) on the basis that plaintiffs do not
sufficiently allege that they employed plaintiffs. (ECF No. 59.) The second is
plaintiffs’ motion pursuant to 29 U.S.C. § 216(b) for conditional certification of a
broad collective action of all non-managerial employees at all Toasties locations.
(ECF No. 62.) Two non-moving defendants—R.J. 49 Rest., LLC (“R.J. 49”) and
Robert Kim—have answered the Amended Complaint. (ECF No. 58.) The
remaining defendants—who have not yet been served in this action—have not
appeared or responded to plaintiffs’ allegations.
For the reasons set forth below, the Moving Defendants’ motion to dismiss is
GRANTED; plaintiffs’ motion for conditional certification is GRANTED IN PART as
modified below.
I.
BACKGROUND
Plaintiffs commenced this action in November 2015, and filed the Amended
Complaint in March 2016, against several corporate entities and individuals,
including the Moving Defendants; plaintiffs allege that the various corporate
defendants did business under the name “Toasties.” (Am. Compl. ¶ 26.) Plaintiffs
allege that they were, or continue to be, employed as delivery persons by nonmoving defendant R.J. 49, which does business as the Toasties delicatessen located
at 148 West 49th Street, New York, NY 10019. (Am. Compl. ¶¶ 13-14, 54, 106.)
Plaintiffs do not allege that they worked at any other Toasties deli, each of which is
owned by a different corporate defendant. Plaintiffs allege that, in addition to their
regularly assigned duties as delivery persons, they were also regularly assigned
certain other tasks. (Am. Compl. ¶¶ 55, 57, 107, 109.)
Plaintiffs allege that all of the defendants were their employer under the
FLSA and NYLL because they were and continue to be a single and joint employer
2
with a “high degree of interrelated and unified operation” who “share common
management, centralized control of labor relations, common ownership, [a] common
control, common website, common business purposes and interrelated goals.” (Am.
Compl. ¶¶ 30, 37-41.) Plaintiffs allege that Toasties has seven active deli locations
in New York City, five of which are listed on Toasties’ website home page, which
describes the business as “a family owned and operated New York Gourmet
Delicatessen.” (Am. Compl. ¶¶ 33-34.) The website also contains links to individual
store menus, Seamless websites, and a listing of telephone numbers. (Am. Compl. ¶
35.)
Plaintiffs allege that the enterprise that does business as Toasties is owned
and operated by individual defendants Robert Kim, Raymond Kim and Susan Kim.
(Am. Compl. ¶ 45.) They allege that Robert Kim and Raymond Kim are twins, and
that Susan Kim is their mother. (Am. Compl. ¶ 45.) Plaintiffs allege that each of
these defendants is “in charge of all areas of the Toasties deli enterprise, including
the hiring and termination of workers, determining the rates of pay, work schedule
(including work hours and work days), type of work assigned, designated work load
and employment policy.” (Am. Compl. ¶¶ 46, 48, 50.)1
Plaintiffs allege that the defendants violated the FLSA and NYLL by: (1)
failing to comply with meal credit requirements, (2) impermissibly retaining tips,
(3) impermissibly deducting from gratuities earned by plaintiffs, (4) failing to pay
the statutory minimum wage, (5) failing to pay overtime, (6) failing to provide
Plaintiffs also allege that defendant Elliot Lee, whom they know as “Manager” and who has not yet
appeared in this action, has similar responsibilities. (Am Compl. ¶ 52.)
1
3
plaintiffs with required notices under the NYLL, and (7) unlawfully retaliating
against Apolinar. (Am Compl. ¶¶ 165-261.)
II.
MOTION TO DISMISS
A.
Legal Standard
To survive a Rule 12(b)(6) motion to dismiss, “the plaintiff must provide the
grounds upon which [its] claim rests through factual allegations sufficient ‘to raise a
right to relief above the speculative level.’” ATSI Commc’ns, Inc. v. Shaar Fund,
Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007)). In other words, the complaint must allege “enough facts to state a
claim to relief that is plausible on its face.” Starr v. Sony BMG Music Entm’t, 592
F.3d 314, 321 (2d Cir. 2010) (quoting Twombly, 550 U.S. at 570); see also Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (same). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at
678.
The Court does not, however, credit “mere conclusory statements” or
“threadbare recitals of the elements of a cause of action.” Id. If the court can infer
no more than “the mere possibility of misconduct” from the factual averments—in
other words, if the well-pleaded allegations of the complaint have not “nudged
claims across the line from conceivable to plausible,” dismissal is appropriate.
Twombly, 550 U.S. at 570; Starr, 592 F.3d at 321 (quoting Iqbal, 556 U.S. at 679).
On a motion to dismiss, the Court accepts as true the factual allegations in
the pleadings and draws all inferences in plaintiffs’ favor. See Iqbal, 556 U.S. at
4
678 (citing Twombly, 550 U.S. at 555-57). If a fact is susceptible to two or more
competing inferences, in evaluating these motions, the Court must, as a matter of
law, draw the inference that favors the plaintiff so long as it is reasonable. N.J.
Carpenters Health Fund v. Royal Bank of Scotland Grp., PLC, 709 F.3d 109, 121
(2d Cir. 2013). “[T]he existence of other, competing inferences does not prevent the
plaintiff[s’] desired inference from qualifying as reasonable unless at least one of
those competing inferences rises to the level of an obvious alternative explanation.”
Id. (internal quotation marks omitted).
Where necessary, the Court may supplement the allegations in the complaint
with facts from documents either referenced in the complaint or relied upon in
framing the complaint. See DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d
Cir. 2010) (“In considering a motion to dismiss for failure to state a claim pursuant
to Rule 12(b)(6), a district court may consider the facts alleged in the complaint,
documents attached to the complaint as exhibits, and documents incorporated by
reference in the complaint.”); Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d
Cir. 2002) (“[W]here plaintiff has actual notice of all the information in the movant's
papers and has relied upon these documents in framing the complaint[,] the
necessity of translating a Rule 12(b)(6) motion into one under Rule 56 is largely
dissipated.” (quoting Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 48 (2d
Cir. 1991)). The Court may also consider “matters of which judicial notice may be
taken.” Brass v. Am. Film Techs., Inc., 987 F.2d 142, 150 (2d Cir. 1993).
5
B.
Discussion
As stated above, the Moving Defendants move to be dismissed from this
action pursuant to Rule 12(b)(6) primarily on the ground that plaintiffs have failed
to adequately allege—by making only boilerplate, conclusory allegations—that they
exercised any formal or functional control over plaintiffs such that they may be held
liable as plaintiffs’ employer under the FLSA or the NYLL.2
An individual or entity may be held liable under the FLSA if it is deemed an
“employer” under the statute. 29 U.S.C. § 203(d). Under the FLSA, an “employer”
includes “any person acting directly or indirectly in the interest of an employer in
relation to an employee.” Id. The Department of Labor’s regulations “expressly
recognize that a worker may be employed by more than one entity at the same
time.” Zheng v. Liberty Apparel Co. Inc., 355 F.3d 61, 66 (2d Cir. 2003) (citing 29
C.F.R. § 791.2(a)). An entity or individual “employs” an individual if it “suffer[s] or
permit[s]” that individual to work. 29 U.S.C. § 203(g).
“[T]he determination of whether an employer-employee relationship exists for
purposes of the FLSA [is] grounded in economic reality rather than technical
concepts.” Irizarry v. Catsimatidis, 722 F.3d 99, 104 (2d Cir. 2013) (quotation
marks omitted). To that end, the FLSA must be “construed . . . liberally to apply
the furthest reaches consistent with congressional action.” Tony & Susan Alamo
Found. v. Sec’y of Labor, 471 U.S. 290, 296 (1985); see also Zheng, 355 F.3d at 69
2 The Moving Defendants’ motion also seeks dismissal of plaintiffs’ implied contract claim and
plaintiffs’ claims for fraudulent filings on particularized grounds. The Court need not and does not
reach these arguments in light of its grant of the Moving Defendants’ motion as to all claims on other
grounds.
6
(stating that the “suffer or permit” language in the statute “necessarily reaches
beyond traditional agency law”). Under Second Circuit precedent, “employment for
FLSA purposes [is] a flexible concept to be determined on a case-by-case basis by
review of the totality of the circumstances.” Irizarry, 722 F.3d at 104. The relevant
factors as to whether an employment relationship exists under the FLSA include
“‘whether the alleged employer (1) had the power to hire and fire the employees, (2)
supervised and controlled employee work schedules or conditions of employment, (3)
determined the rate and method of payment, and (4) maintained employment
records.’” Id. at 104-05 (quoting Barfield v. New York City Health & Hosps. Corp.,
537 F.3d 132, 142 (2d Cir. 2008)). These factors are not exclusive and no one factor
is dispositive. Id. at 105.3 The same analysis that applies to FLSA claims also
applies to claims brought under the NYLL. Xue Lian Lin v. Comprehensive Health
Mgmt., Inc., No. 08 Civ. 6519 (PKC), 2009 WL 976835, at *2 (S.D.N.Y. Apr. 9, 2009)
(citing Cannon v. Douglas Elliman, LLC, No. 06 Civ. 7092 (NRB), 2007 WL
4358456, at *4 (S.D.N.Y. Dec. 10, 2007)). The Court first addresses whether
plaintiffs have adequately pled that the corporate defendants, R.J. 51 and N.J. 52
(collectively, the “Corporate Moving Defendants”), are their employers under the
FLSA, and then considers whether plaintiffs have done so as to defendant Susan
Kim.
3 Although the Second Circuit has applied a different test in the context of distinguishing an
employee from an independent contractor, it has instructed that the four-factor test discussed above
is useful in cases, such as this one, where the issue is whether the defendant may properly be
considered a joint employer. Zheng, 355 F.3d at 67.
7
Plaintiffs allege that all of the corporate entity defendants—including the
Moving Corporate Defendants—constitute a joint employer based on the theory that
they operate as a single enterprise with significant interrelation of operations.4
Courts within this District have applied the “single integrated enterprise” test to
“assess whether a group of distinct but closely affiliated entities should be treated
as a single employer for FLSA purposes.” Juarez v. 449 Rest., Inc., 29 F. Supp. 3d
363, 367 (S.D.N.Y. 2014) (collecting cases). Under that test, “courts consider (1)
interrelation of operations, (2) centralized control of labor relations, (3) common
management, and (4) common ownership or financial control.” Id.; see also Barfield,
537 F.3d at 149 (viewing “joint employment as a question to be resolved from the
totality of the evidence”).
Plaintiffs, in large part, support their single enterprise theory by relying on a
number of conclusory allegations that merely plead the presence of the relevant
factors necessary to establish common control and joint employer status. (Am.
Compl. ¶¶ 30, 37-42.) Plaintiffs also rely on allegations that five of the seven
Toasties locations—all of which are located in midtown Manhattan—are listed on
the same website that describes Toasties as “a family owned and operated New
York Gourmet Delicatessen,” contains links to Seamless websites, and provides
telephone numbers and identical menus for each location. (Am. Compl. ¶¶ 33-35,
4 At least in certain other contexts, the Second Circuit has explained that a single integrated
enterprise theory is distinct from a joint employer theory. See Arculeo v. On-Site Sales & Mktg.,
LLC, 425 F.3d 193, 198 (2d Cir. 2005) (distinguishing single integrated enterprise and joint employer
doctrines in Title VII context). Here, plaintiffs meld both concepts together.
8
45; see also Am. Compl., Ex. 6.)5 As explained below, these allegations do not
plausibly support Moving Corporate Defendants’ status as plaintiffs’ employers
under the FLSA or the NYLL.
Although plaintiffs have plausibly alleged, based on their allegations relating
to the content of the Toasties website, that there existed common ownership and a
common purpose for at least several of the corporate defendants, the allegations,
even when accepted as true as they must be on this motion, do not establish that
the Moving Corporate Defendants had an interrelation of operations or centralized
control of labor relations with plaintiffs’ identified direct corporate employer, R.J.
49. Lopez v. Acme Am. Envtl. Co., No. 12 Civ. 511 (WHP), 2012 WL 6062501, at *4
(S.D.N.Y. Dec. 6, 2012) (“Allegations of common ownership and common purpose,
without more, do not answer the fundamental question of whether each corporate
entity controlled Plaintiffs as employees.”). Plaintiffs do not allege that the Moving
Corporate Defendants had any sort of direct employer responsibility over them,
such as the ability to hire or fire, or set work hours or job responsibilities. See, e.g.,
Diaz v. Consortium for Worker Educ., Inc., No. 10 Civ. 01848 (LAP), 2010 WL
3910280, at *4 (S.D.N.Y. Sept. 28, 2010) (dismissing FLSA claims against
defendants which plaintiffs did not allege had “any direct role in managing the
5 In their opposition brief, plaintiffs also seek to rely on affidavits submitted in support of their
motion for conditional certification stating that there are at least two employees of R.J. 51 who are
victims of defendants’ common policy of deducting tips from deliverymen for online orders. (Troy
Decl., Ex. 2 ¶¶ 51-54, Ex. 3 ¶¶ 31-35, ECF No. 63.) Because these assertions do not appear in the
Amended Complaint and there is no basis upon which the Court may incorporate them into the
Amended Complaint, these purported facts may not properly be considered by the Court on this
motion. Chambers, 282 F.3d at 154; Santana v. Fishlegs, LLC, No. 13 Civ. 01628 (LGS), 2013 WL
5951438, at *8 (S.D.N.Y. Nov. 7, 2013).
9
plaintiffs, hiring or firing the plaintiffs, determining their work hours, or
maintaining employment records”).6 Merely reciting the elements of a joint
employer arrangement—which is primarily what plaintiffs do here—is insufficient
to plausibly allege joint employer status. Cannon, 2007 WL 4358456, at *5. That is
because, even if the Moving Corporate Defendants are “part of an ‘integrated
enterprise’ or ‘engaged in a joint venture,’” the various corporate Toasties entities
“may nevertheless employ separate people and, absent control, are not liable for the
separate employees of joint ventures.” Lopez, 2012 WL 6062501, at *4; see also
Santana, 2013 WL 5951438, at *8; Cannon, 2007 WL 4358456, at *4. Simply put,
plaintiffs’ allegations do not go beyond alleging common ownership and a common
business plan and purpose. Their allegations entirely leave out the relationship
that plaintiffs, as employees, had to the Toasties locations besides the one location
at which plaintiffs actually worked.
Susan Kim, the Individual Moving Defendant, seeks dismissal of the claims
against her on similar grounds. The Court agrees that plaintiffs do not adequately
allege that Susan Kim was their employer under the FLSA and NYLL. “Officers
and owners of corporations may be deemed employers under the FLSA where ‘the
individual has overall operational control of the corporation, possesses an ownership
This conclusion is not inconsistent with Juarez v. 449 Restaurant, Inc., in which the court
concluded that the plaintiff had plausibly alleged that the defendants operated as a single integrated
enterprise and thus qualified as a single statutory employer under the FLSA. 29 F. Supp. 3d at 368.
In that case, in addition to allegations relating to defendants’ sharing of a website, the use of the
same or similar menus, and that workers at different job locations wear the same uniform, the court
also concluded that the plaintiff plausibly alleged centralized control of labor relations based on the
allegations that plaintiff had worked at three locations and that non-exempt workers were directed
and/or permitted to perform work at multiple job locations. Id. The latter sort of allegations are
absent here.
6
10
interest in it, controls significant functions of the business, or determines the
employees’ salaries and makes hiring decisions.’” Ansoumana v. Gristede’s
Operating Corp., 255 F. Supp. 2d 184, 192 (S.D.N.Y. 2003) (quoting Lopez v.
Silverman, 14 F. Supp. 2d 405, 412 (S.D.N.Y. 1998)); accord Tracy v. NVR, Inc., 667
F. Supp. 2d 244, 246 (W.D.N.Y. 2009). The Amended Complaint alleges that Susan
Kim is plaintiffs’ employer for FLSA purposes based on the allegations that the
Toasties website states that all locations are owned and operated by a family,
plaintiffs know Susan Kim as “Boss’ Mother,” and based on the conclusory
allegation—using identical language that plaintiffs use with respect to the other
individual defendants—that Susan Kim “is in charge of all areas of the Toasties deli
enterprise, including the hiring and termination of workers, determining the rates
of pay, work schedule (including work hours and work days), type of work assigned,
designated work load and employment policy.” (Am. Compl. ¶¶ 34, 45, 48.) Again,
plaintiffs’ conclusory allegations—which merely plead the presence of the factors
relevant to whether an individual is a joint employer—are insufficient to plausibly
show that Susan Kim was their employer for purposes of the FLSA. The Amended
Complaint is devoid of any non-conclusory allegations suggesting that Susan Kim
exercised any degree over the particular Toasties location that employed plaintiffs,
or that she otherwise had any direct relationship of control over plaintiffs’ terms
and conditions of employment. See Bravo v. Eastpoint Int’l, Inc., No. 99 Civ. 9474
(WK), 2001 WL 314622, at *2 (S.D.N.Y. Mar. 30, 2001) (dismissing claims against
alleged owner and chairperson because there was no fact tending to establish her
11
power to control the plaintiff workers); see also Wolman v. Catholic Health Sys. of
Long Island, Inc., 853 F. Supp. 2d 290, 299 (E.D.N.Y. 2012) (“[C]ourts will not find
individual liability when the relationship between plaintiff-employees and the
putative employer is too attenuated, especially when the entity has a significant
number of employees.”), aff’d in part, rev’d in part sub nom. Lundy v. Catholic
Health Sys. of Long Island Inc., 711 F.3d 106 (2d Cir. 2013).
Thus, for the foregoing reasons, the Moving Defendants’ motion to dismiss is
GRANTED. This action is hereby dismissed as to defendants R.J. 51 Inc., N.J. 52
Inc. and Susan Kim.7
III.
MOTION FOR CONDITIONAL CERTIFICATION
A.
Legal Standard
Section 216(b) of the FLSA authorizes employees to maintain collective
actions where they are “similarly situated” with respect to the alleged violations of
the FLSA. 29 U.S.C. § 216(b); Myers v. Hertz Corp., 624 F.3d 537, 555 (2d Cir.
The Court also dismisses, sua sponte, all of the defendants who have not been served with the
Summons and Complaint or the Amended Complaint, without prejudice. These defendants include
individuals Elliot Lee and Raymond Kim, and corporate defendants John Doe Corporation d/b/a
Toasties, Ark 48th Corp. d/b/a Toasties, 924 Third Ave. Deli, Inc. d/b/a Toasties, Toasties One Corp.
d/b/a Toasties, Toasties Deli Corp. d/b/a Toasties, and CCKO, Inc. d/b/a Toasties. Under the version
of Rule 4(m) in effect at the time this action was filed, a court was required to dismiss a defendant
without prejudice or order that service be made within a specified time if such defendant was not
served within 120 days after the complaint was filed. Fed. R. Civ. P. 4(m); see Diaz v. Amber
Transp., LLC, No. 15 Civ. 05820, 2016 WL 1312592, at *2 n.1 (S.D.N.Y. Apr. 4, 2016) (finding that
120-day period appropriate where complaint filed before 2015 amendments went into effect); accord
Li v. Ichiro Sushi, Inc., No. 14-cv-10242(AJN), 2016 WL 1271068, at *3 n.4 (S.D.N.Y. Mar. 29, 2016).
Because this action was filed on November 4, 2015, plaintiffs were required to serve these
defendants not later than March 3, 2016. While a court must extend the time for service if the
plaintiff can demonstrate good cause, Diaz, 2016 WL 1312592, at *2, plaintiffs have provided no
explanation for their delay, nor have they even sought an extension of time to serve these
defendants. The Court declines to allow service outside the 120-day time period.
7
12
2010). Similarly situated employees must “opt in” to an action by filing a “consent
in writing to become . . . a party.” 29 U.S.C. § 216(b).
Certification of a “collective action” is a two-step process in the Second
Circuit. See Myers, 624 F.3d at 554–55. At the first step (conditional certification),
the Court simply authorizes notice to be sent to potential similarly situated
plaintiffs. Id. at 555. Plaintiffs bear the light burden of making a “modest factual
showing” that the named initial plaintiffs and the potential opt-in plaintiffs
“together were victims of a common policy or plan that violated the law.” Id.
(quoting Hoffman v. Sbarro, Inc., 982 F. Supp. 249, 261 (S.D.N.Y. 1997)). The
burden may be satisfied through the pleadings and affidavits alone. IglesiasMendoza v. La Bell Farm. Inc., 239 F.R.D. 363, 367 (S.D.N.Y. 2007).
At the second step, defendants have the opportunity to move for
decertification if, after additional discovery, the record shows that the opt-in
plaintiffs are not, in fact, similarly situated to the named plaintiffs. See Myers, 624
F.3d at 555.
B.
Discussion
Plaintiffs seek to conditionally certify a collective action pursuant to 29
U.S.C. § 216(b) that includes:
All non-managerial employees of the Defendants,
including but not limited to or any other equivalent
employee, who previously worked, or is currently working
for Defendants during the past three (3) years and who:
(i) did not receive at least the minimum wage for
each hour worked;
(ii) were subject to illegal tip retention;
(iii) were subject to illegal meal deductions; and/or
(iv) were subject to illegal kickbacks.
13
(Mem. of Law in Support of Pls.’ Mot. for Conditional Certification at 4, ECF No. 64;
see also Am. Compl. ¶¶ 152-53.) Plaintiffs thus seek to conditionally certify a
collective action of all non-managerial employees (regardless of specific position) for
all Toasties locations, including those owned by the defendants whom the Court has
now dismissed pursuant to Rule 12(b)(6) or due to a failure to effect timely service.
Plaintiffs’ motion is supported by affidavits from the two named plaintiffs and
prospective collective action members, Apolinar (Troy Decl., Ex. 2 (“Apolinar Aff.”),
ECF No. 63-2) and Vargas (Troy Decl., Ex. 3 (“Vargas Aff.”), ECF No. 63-3).
Defendants oppose conditional certification, arguing that the Court should either
deny the motion in its entirety or, in the alternative, should limit the collective
action to only include delivery persons who worked at R.J. 49 Rest., LLC d/b/a
Toasties located at 148 West 49th Street, New York, NY 10019. (Defs.’ Mem. of
Law in Opp. to Pls.’ Mot. for Conditional Collective Certification at 3, 18, ECF No.
68.)
At the outset, plaintiffs are not entitled to conditional certification of a
collective action that includes workers at other Toasties locations in light of the
Court’s dismissal of the employers at those other locations. Furthermore, even if
these defendants were not dismissed, plaintiffs have nonetheless failed to meet
their modest factual showing to warrant conditional certification of the broad
collective action that they seek, both in terms of the number of Toasties locations
they seek to include as well as the extension of the collective action to employees
other than delivery persons. That being said, the Court does conclude that
14
plaintiffs have made a sufficient showing to warrant conditional certification of a
collective action limited to delivery persons employed by R.J. 49, which owns the
one Toasties location at which both named plaintiffs worked as delivery persons.
Below, the Court lays out plaintiffs’ evidence supporting their motion, and then
explains why it is only sufficient to support conditional certification of a narrow
collective action.
Apolinar’s affidavit states that he was employed by defendants Robert Kim
and Elliot Lee for the Toasties located at 148 W 49th Street, New York, NY 10019
as a delivery person from June 1, 2010 to March 22, 2016 (Apolinar Aff. ¶ 3);
Vargas’s affidavit states that he has also been employed as a delivery person at the
same location from April 1, 2013 to the present (Vargas Aff. ¶ 3). Both plaintiffs
assert that they were regularly assigned—in addition to their duties as delivery
persons—tasks that included cutting and peeling carrots, arranging sodas, and
cleaning various parts of the deli. (Apolinar Aff. ¶¶ 4-5; Vargas ¶¶ 4-5.) Both
plaintiffs also claim that their boss, Robert Kim, regularly engaged in illegal
practices including, inter alia, retaining tips from delivery persons, deducting pay
for meals for delivery persons and requiring delivery persons to make kickbacks to
defendants. (Apolinar Aff. ¶¶ 14, 16-18, 33-40, 45-46, 50; Vargas ¶¶ 10, 16-21, 2631.) Specifically, plaintiffs claim that Robert Kim, inter alia: (1) deducted 100% of
customer tips in credit card orders from their pay, (2) prior to December 1, 2015,
deducted 15% of customer tips in Seamless and GrubHub orders from delivery
persons’ pay, and (3) starting on December 1, 2015, began charging a 15% delivery
15
fee for all Seamless and GrubHub customer orders but did not share any portion of
the fees with delivery persons. (Apolinar Aff. ¶¶ 33-34, 36-37; Vargas ¶¶ 16-19.)
Plaintiffs also claim that Robert Kim deducted two meals per day from delivery
persons who worked the early shift even though they actually only took one meal
per day, and required delivery persons to purchase and maintain bicycles without
reimbursement. (Apolinar Aff. ¶¶ 12-14; Vargas ¶¶ 9-15.)
In addition to the allegations relating to plaintiffs’ own experiences as
delivery persons working for R.J. 49, plaintiffs also each claim to have
independently spoken on the street to a delivery person (identified only as Alexis
and Mario) who worked for R.J. 51. Plaintiffs assert that Alexis and Mario each
told one of the plaintiffs that the Toasties store located at 51st street (owned by now
dismissed defendant R.J. 51) engaged in similar illegal practices as the Toasties deli
owned by R.J. 49, including deducting 15% of customer tips on Seamless orders
and—for a brief period in early 2016—charging delivery fees without sharing them
with delivery persons. (Apolinar Aff. ¶¶ 52-54; Vargas ¶¶ 32-35.)
Defendants argue that plaintiffs’ factual assertions—which, as discussed
above, are based on plaintiffs’ own experiences working as delivery persons at R.J.
49 and their chance encounters with delivery persons working at R.J. 51—are
insufficient to support their broad proposed collective action. The Court agrees.
Plaintiffs have failed to meet their modest burden of showing that there existed a
uniform unlawful policy or practice across all Toasties locations or that such a policy
applied to employees other than delivery persons at R.J. 49. Trinidad v. Pret A
16
Manger (USA) Ltd., 962 F. Supp. 2d 545, 557-58 (S.D.N.Y. 2013). Simply put,
plaintiffs’ own experiences as delivery persons employed at the Toasties location
owned by R.J. 49 says nothing about the existence of illegal employment policies at
other Toasties locations or whether such policies also applied to employees who
occupied other positions at the R.J. 49 location. To the extent that plaintiffs’
affidavits support the existence of a common policy, their assertions support only
the inference that such policy extends to delivery persons. There is no logical basis,
based on the factual materials that plaintiffs have submitted, that would allow the
Court to infer that the unlawful policies they allege, which primarily relate to
delivery fees and delivery tips, also applied to employees who occupied other roles.
Moreover, plaintiffs’ assertions relating to their own experiences, which exclusively
concern the Toasties location owned by R.J. 49, do not suggest that the same
policies applied to delivery persons at other Toasties locations.8
Plaintiffs’ assertions that two delivery persons employed by R.J. 51 told
plaintiffs in passing that R.J. 51 maintained similar illegal employment policies are
similarly insufficient to meet even plaintiffs’ modest burden at this stage to show
that the scope of any illegal policies extended beyond R.J. 49. First, both delivery
persons with whom plaintiffs spoke worked at R.J. 51, which has been dismissed
Although it is not the Court’s role to resolve factual disputes at this stage, e.g., Amador v. Morgan
Stanley & Co. LLC, No. 11 Civ. 4326 (RJS), 2013 WL 494020, at *3 (S.D.N.Y. Feb. 7, 2013), the Court
notes that defendants have also submitted a declaration from Robert Kim in which he asserts that
there are no coordinated payroll or personnel practices or policies between R.J. 49 and any other
Toasties locations and that he has no knowledge of the payroll practices or policies employed by any
Toasties location other than the location owned by R.J. 49 (Kim Decl. ¶¶ 4, 8, ECF No. 69). In light
of Mr. Kim’s declaration, plaintiffs’ allegations of common ownership are insufficient to meet their
burden to show that the same unlawful employment policy was in place at all Toasties locations.
Guaman v. 5 M Corp., No. 13 Civ. 03820(LGS), 2013 WL 5745905, at *3 (S.D.N.Y. Oct. 23, 2013).
8
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from this action with prejudice as set forth above. Plaintiffs have presented no facts
showing that any common policies existed at any other Toasties location.9 Thus,
even if the employers at the other Toasties locations had not been dismissed, there
is no basis to find that a collective action should extend to include employees who
worked at a Toasties location other than that owned by R.J. 49. Hamadou v. Hess
Corp., 915 F. Supp. 2d 651, 666 (S.D.N.Y. 2013) (declining to certify statewide class
where the plaintiffs did not even offer hearsay evidence about stations in most of
New York State). Second, even if R.J. 51 had not been dismissed from this action,
the asserted similarities between the practices at R.J. 49 and R.J. 51, which relate
solely to tip retention, are based on uncorroborated anecdotal hearsay and are too
tenuous to support the existence of a common policy across both Toasties locations.
Guaman, 2013 WL 5745905, at *3; Urresta v. MBJ Cafeteria Corp., 2011 U.S. Dist.
LEXIS 120126, at *15 (S.D.N.Y. Oct. 17, 2011); Barfield v. New York City Health &
Hosps. Corp., 2005 U.S. Dist. LEXIS 28884, at *3 (S.D.N.Y. Nov. 17, 2005).
According to plaintiffs’ assertions as to what they were told by the two delivery
persons for R.J. 51, the alleged illegal practices at the two locations did not even
commence at the approximately same time period. (See Apolinar Aff. ¶ 54; Vargas
Aff. ¶ 33.) Furthermore, plaintiffs do not assert that the R.J. 51 delivery persons
with whom they spoke said anything about unlawful deduction of pay for meals or
9 Plaintiffs also attempt to rely on two other cases alleging similar claims against Toasties entities
that are pending in this District, Lopez v. ARK 48 Corporation, 15-cv-4160 (CM) (S.D.N.Y.), and
Martorella v. Ark 48 Corporation, 16-cv-1126 (CM) (S.D.N.Y.). In contrast to this case, the
allegations in Lopez and Martorella focus on minimum wage and overtime violations; moreover, the
allegations in neither case have been proven, and a review of the applicable dockets demonstrates
that no collective action has been conditionally certified in either action.
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illegal kickbacks. Finally, plaintiffs’ vague and conclusory assertions that they have
had conversations with other delivery persons working at other Toasties stores
about Toasties’ policy to deduct customer tips from delivery persons (Apolinar Aff.
¶¶ 50-51; Vargas ¶ 31) do not create a sufficient factual basis to support the
existence of a common illegal policy implemented against delivery persons across
the several Toasties locations. Sharma v. Burberry Ltd., 52 F. Supp. 3d 443, 458
(E.D.N.Y. 2014).
Notwithstanding the foregoing, the Court does conclude—and defendants do
not seriously challenge in their opposition (Defs.’ Mem. of Law in Opp. to Pls.’ Mot.
for Conditional Collective Certification at 14-15)—that, when considered in their
totality, the Amended Complaint and plaintiffs’ affidavits suggest the existence of
common policies applicable to delivery persons employed at R.J. 49 that involve
illegal retention of tips, deduction of pay for meals and the requirement that
delivery persons make kickbacks. As to this narrowly defined group of individuals,
plaintiffs’ evidence is sufficient to support conditional certification at this stage.
Accordingly, the Court hereby conditionally certifies a collective action of all
current and former delivery persons at R.J. 49 Rest., LLC d/b/a Toasties located at
148 West 49th Street, New York, NY 10019 who, from November 4, 2012 to the
present day, allege that they were subject to unpaid minimum wage compensation,
illegal meal deductions, illegal retention of tips, and unlawful deductions and
kickbacks in violation of the FLSA. Should facts develop suggesting that any opt-in
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plaintiffs are not similarly situated, defendants may move for decertification at that
time.
In their opposition brief, defendants request—based in part on numerous
typos and other errors contained in plaintiffs’ proposed notice (see Troy Decl., Ex. 4,
ECF No. 63-4)—that the Court defer ruling on the request for approval of plaintiffs’
proposed notice and allow the parties two weeks to meet and confer on the terms of
a notice and the terms of disclosure relating to the notice. That request is granted.
The Court agrees that it is appropriate to allow the parties to jointly prepare a
proposed notice and identify more precisely any issues which may exist following
the Court’s limitation of the scope of plaintiffs’ sought collective action. Flood v.
Carlson Rests., Inc., 2015 U.S. Dist. LEXIS 6608, at *17-18 (S.D.N.Y. Jan. 20,
2015); Mark v. Gawker Media LLC, 2014 U.S. Dist. LEXIS 114011, at *23-24
(S.D.N.Y. Aug. 15, 2014). The parties shall therefore meet and confer regarding the
terms of plaintiffs’ proposed notice, and shall present any remaining issues to the
Court, not later than June 6, 2016.
Finally, the Court notes that plaintiffs also request that this Court direct
defendants to produce social security numbers and telephone numbers of allegedly
similarly situated employees and post the approved notice in conspicuous locations,
and to authorize equitable tolling of the statute of limitation pending the expiration
of the opt-in period. Except with respect to plaintiffs’ request for phone numbers,
these requests are denied with leave to renew. The Court believes that it is
appropriate to provide plaintiffs with phone numbers for allegedly similarly
20
situated employees given the prevalence of text messaging as a popular and
effective form of communication. As to plaintiffs’ requests for production of social
security numbers and the posting of the notice in conspicuous places, the Court
believes that, at this stage, plaintiffs’ request is premature, and therefore denies it
with leave to renew should a significant number of notices be returned as
undeliverable. See, e.g., Michael v. Bloomberg L.P., 2015 U.S. Dist. LEXIS 51030,
at *9-10 (S.D.N.Y. Apr. 17, 2015). As to plaintiffs’ request for equitable tolling,
plaintiffs’ request is premature and they have not demonstrated that such tolling is
warranted at this time. Whitehorn v. Wolfgang’s Steakhouse, Inc., 767 F. Supp. 2d
445, 449 (S.D.N.Y. 2011) (“While signed consents do not relate back to the original
filing date of the complaint, the court may apply equitable tolling as a matter of
fairness where a party has been prevented in some extraordinary way from
exercising his rights.” (citations, quotation marks and alterations omitted)).
Plaintiffs’ request is therefore denied with leave to renew upon a stronger showing
that any opt-in plaintiffs have been prevented from exercising their rights.
IV.
CONCLUSION
For the reasons set forth above, it is hereby ORDERED that defendants R.J.
51 Inc.’s, N.J. 52 Inc.’s and Susan Kim’s motion to dismiss is GRANTED. The Court
also dismisses, sua sponte, defendants Elliot Lee, Raymond Kim, John Doe
Corporation d/b/a Toasties, Ark 48th Corp. d/b/a Toasties, 924 Third Ave. Deli, Inc.
d/b/a Toasties, Toasties One Corp. d/b/a Toasties, Toasties Deli Corp. d/b/a Toasties,
and CCKO, Inc. d/b/a Toasties due to plaintiffs’ failure to timely serve them.
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It is further ORDERED that plaintiffs’ motion for conditional certification of
a collective action is GRANTED IN PART. As set forth in this Opinion & Order, the
parties shall meet and confer regarding the terms of plaintiffs’ proposed notice and
present any remaining issues to the Court not later than June 6, 2016.
The Clerk of Court is directed to close the motions at ECF Nos. 59 and 62.
SO ORDERED.
Dated:
New York, New York
May 18, 2016
KATHERINE B. FORREST
United States District Judge
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