Gionfriddo v. Jason Zink, LLC
769 F. Supp. 2d 880
D. Maryland2011Background
- This case involves four named Plaintiffs and opt-in Plaintiff Emar against Jason Zink, LLC, JR Zink, Inc., and Jason Zink, as owner-employer of two Baltimore taverns (Dont Know and No Idea).
- Plaintiffs allege FLSA, Maryland Wage and Hour Law (MWHL), and Maryland Wage Payment and Collection Law (MWPCL) violations due to the owner’s participation in a tip pool.
- Zink, as owner, also bartends and shares in the tip pool under a formula based on hours worked; he does not take a salary from the Taverns.
- Defendants moved to decertify the collective action, and to dismiss or limit damages; Plaintiffs cross-moved for partial summary judgment.
- The court treated the January 21, 2010 order as conditional certification, and addressed decertification, then proceeded to summary judgment on the merits.
- The court held that owner-employer may not participate in employee tip pools under the FLSA and MWHL; decertification of the collective action as to Emar and Garrison was granted; Garrison’s claims severed; damages issues reserved for later.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Tip pool participation by an owner-employer under FLSA | Gionfriddo, Gilbert, Zetzer: owner cannot share in tips if tip credit used | Zink can be both employer and tipped employee; tip pool permissible | Owner may not participate in tip pool under FLSA/MWHL |
| Single enterprise status for taverns | Taverns operated under common control and purpose; revenues exceed $500k | Separate entities distinct enterprises; no single enterprise | No Idea and Dont Know constitute a single enterprise under FLSA; combined revenues exceed $500k |
| Willfulness and limitations under FLSA | Willful violation; 3-year look-back applies | Possible non-willful interpretation; two-year look-back may apply | Willfulness is a factual issue to be resolved at trial; limitations depend on willfulness; not decided at summary judgment |
| Decertification of the collective action | Group of bartenders share common claims; should remain collective | Disparate claims and individual defenses; decertification warranted | Decertification granted for Emar and Garrison; Emar dismissed without prejudice; Garrison severed to pursue separate action |
Key Cases Cited
- McLaughlin v. Richland Shoe Co., 486 U.S. 128 (Supreme Court 1988) (willfulness requires knowledge or reckless disregard; not mere negligence)
- Brock v. Hamad, 867 F.2d 804 (4th Cir. 1989) (single enterprise requires related activities, unified operation or common control, and common business purpose)
- Donovan v. Grim Hotel Co., 747 F.2d 966 (5th Cir. 1984) (example of multiple hotels under common control forming a single enterprise)
- Rawls v. Augustine Home Health Care, Inc., 244 F.R.D. 298 (D.Md. 2007) (two-step FLSA collective action certification; decertification standard)
- Desmond v. PNGI Charles Town Gaming, LLC, 630 F.3d 351 (4th Cir. 2011) (willfulness affects damages and limitations under FLSA)