Dorsey v. TGT Consulting, LLC
888 F. Supp. 2d 670
D. Maryland2012Background
- This FLSA collective action alleges minimum wage and overtime violations at Greene Turtle restaurants and related entities.
- Discovery focused on the tip credit under 29 U.S.C. § 203(m); motions include summary judgment, decertification, sanctions, and sealing.
- Greene Turtle locations use standardized hiring/training procedures; DeVito oversees HR; TGT provides payroll services.
- Evidence concerns whether employees were informed of the tip credit; some affidavits claim oral notification, others deny it.
- A new DOL regulation, 29 C.F.R. § 531.59(b), imposes a stricter notice requirement that tips must be retained; retroactivity is contested.
- The court denies most motions, denies plaintiffs’ summary judgment on retroactivity, but allows sealing and strikes a couple of defenses; decertification is denied for now.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether tip credit notice complied with 203(m) and retroactivity | Dorsey argues no proper notice was given of the tip credit under 203(m). | Defendants contend pay stubs/oral briefing sufficed to notify; and the new rule should apply retroactively. | Retroactivity denied; genuine dispute on notice sufficiency remains. |
| Whether pay stubs alone informed employees of the tip credit | Plaintiffs contend pay statements did not inform about tip credit or retention of tips. | Defendants rely on earnings statements as informing the tip credit. | Pay stubs insufficient to inform; material fact dispute remains over oral notification. |
| Whether the new tip credit notification regulation applies retroactively | Rule should apply retroactively as a clarifying regulation. | Regulation not retroactive; there is no clear language requiring retroactivity. | New rule does not apply retroactively. |
| Whether the case should be decertified as a collective action | The class is similarly situated; decertification would be inappropriate. | There is no uniform policy; defenses are individualized; decertification warranted. | Decertification not appropriate at this time. |
Key Cases Cited
- Gionfriddo v. Jason Zink, LLC, 769 F.Supp.2d 880 (D.Md.2011) (tip credit notice requirements are strictly construed)
- Bernal v. Vankar Enters., Inc., 579 F.Supp.2d 804 (W.D.Tex.2008) (informing employees of tip credit is required beyond awareness)
- Reich v. Chez Robert, Inc., 821 F.Supp.967 (D.N.J.1993) (employer must explain tip credit and minimum wage structure)
- Copantitla v. Fiskardo Estiatorio, Inc., 788 F.Supp.2d 253 (S.D.N.Y.2011) (strict interpretation of tip credit notice requirements)
- Davis v. B. & S., Inc., 38 F.Supp.2d 707 (N.D.Ind.1998) (notice may come from employer communications; handling of tips)
- Whiting v. Johns Hopkins Hosp., 680 F.Supp.2d 750 (D.Md.2010) (whether regulation clarifies vs changes existing law; retroactivity considerations)