Copantitla v. Fiskardo Estiatorio, Inc.
2011 U.S. Dist. LEXIS 58670
| S.D.N.Y. | 2011Background
- Thalassa Restaurant, operated by Fiskardo Estiatorio, Inc., employed plaintiffs alleging FLSA/NYLL violations (minimum wage, overtime, and related claims) and NYCHRL/NYSHRL harassment claims.
- Banquet Service Charges were routinely collected (about 20%, later 15%) and portions were retained by the restaurant for marketing; some notices referred to charges as gratuities or service charges.
- Plaintiffs alleged tip pooling among front-of-the-house staff; general managers and Makris family members occupied key management roles across Thalassa and Fantis Foods, with overlapping ownership and payroll arrangements.
- An October 2008 incident involved a group delivering a labor-violation letter; NLRB proceedings later found certain 8(a)(1) violations and protected activity.
- Defendants argued various defenses including corporate-employee status, the propriety of tip credits under World Yacht, and procedural defenses; this motion practice followed cross-motions for partial summary judgment.
- Judge Holwell granted in part and denied in part: several wage- and employer-status issues resolved, while others (e.g., some harassment claims, some equitable-relief issues) remained for trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does NY Labor Law §196-d apply to Thalassa's banquet charges and are they retroactive to World Yacht? | Banquet charges function as gratuities; World Yacht should apply retroactively. | World Yacht is not retroactive and banquet charges may not be gratuities. | World Yacht retroactive; Banquet Service Charges deemed gratuities under §196-d. |
| Did defendants violate minimum wage laws by misapplying tip credits and failing to provide proper notice? | Tip credits were improperly used; employees were not properly informed per §203(m). | Notice satisfied via posters and explanations; tip credit permissible. | Notice not satisfied; tip credit disallowed; federal and New York minimum-wage violations established. |
| How should overtime for tipped employees be calculated under FLSA/NYLL when tip credits are disallowed? | Overtime must be computed using the applicable minimum wage as floor, including proper tip credit if allowed. | Overtime should be 1.5 times the base rate before tips. | Overtime must be calculated using the high-ground method (not base rate alone); incorrect method rejected; overtime violations found. |
| Are Julia Makris, Fantis Foods, and George Makris employers under the FLSA/NYLL? | Economic realities and control context make them liable as employers. | lacking direct control; not employers. | Julia Makris and Fantis Foods are not employers; Steve Makris is an employer; George Makris not an employer. |
| Does Vargas' October 2008 interrogation give rise to false imprisonment, and is retaliation proven for other plaintiffs? | Interrogation and threats created confinement-like pressure; retaliation for wage/tip complaints existed. | No confinement; no causally connected retaliation for many plaintiffs. | Vargas false imprisonment dismissed; several retaliation claims rejected as to specific plaintiffs; others remain contested. |
Key Cases Cited
- Samiento v. World Yacht Inc., 10 N.Y.3d 70 (N.Y. 2008) (service charges may be gratuities under NY_labour law §196-d when customers expect gratuity)
- World Yacht, Inc. v. Samiento, 854 N.Y.S.2d 83 (N.Y. App. Div. 2008) (interpretation of gratuity/service charge under §196-d; retroactivity analysis)
- Barfield v. New York City Health and Hospitals Corp., 537 F.3d 132 (2d Cir. 2008) (economic-realities test for employer status under the FLSA)
- RSR Sec. Srvcs., Ltd. v. Portnoy, 172 F.3d 132 (2d Cir. 1999) (functional control framework for employer status under FLSA)
- Chan v. Sung Yue Tung Corp., 2007 WL 313483 (S.D.N.Y. 2007) (banquet/service-charge interpretation context (note: WL cited; official reporter not provided here))