Roman v. Guapos III, Inc.
970 F. Supp. 2d 407
D. Maryland2013Background
- Plaintiffs are three tipped employees who worked only at Guapos III, Inc. (Gaithersburg) and allege unpaid minimum wages and overtime and improper tip-credit notices.
- There are five separately incorporated Guapo’s restaurants; plaintiffs allege common ownership/centralized operation under Hector Rincon and family.
- Plaintiffs sued under the FLSA as a collective (all tipped employees of Defendants since Sept. 20, 2009) and under the Maryland Wage and Hour Law as a class.
- Defendants moved to dismiss claims against four corporate Guapo’s entities and two individual Rincons; two defendants did not move.
- Court analyzed whether plaintiffs adequately alleged an employer-employee relationship (FLSA/MWHL) with each defendant to establish Article III standing and FLSA liability.
- Court dismissed claims against the four non-Gaithersburg corporate defendants for lack of standing, but denied dismissal as to Hector Rincon Sr. and Hector Rincon Jr.; granted a protective order precluding depositions of the dismissed corporate defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether non-Gaithersburg Guapo’s are "employers" under FLSA/MWHL | The separately incorporated restaurants operate as a single integrated enterprise or joint employer via common ownership, payroll, website, bookkeeper | Plaintiffs never worked for those entities; complaint lacks facts showing those corporations controlled plaintiffs’ employment | Dismissed: plaintiffs lack standing as to those corporate defendants because they failed to plead an employer-employee relationship or traceable injury against them |
| Whether named individual Rincons are "employers" under FLSA/MWHL | Rincon Sr. and Jr. exercised control over hiring, firing, schedules, pay and thus are employers | Individual liability should not attach absent factual allegations of direct control | Not dismissed: allegations that Rincon Sr. (company president/owner) and Rincon Jr. (co-owner/manager at Gaithersburg) had authority to hire/fire, set schedules and pay state plausible individual employer claims |
| Use of "single integrated enterprise" theory to reach non-employer entities under FLSA | Doctrine should apply to hold related entities jointly liable despite separate incorporations | FLSA requires an employer-employee relationship; plaintiffs improperly rely on doctrines from other statutes (Title VII, NLRA) | Rejected: court follows Bonnette/economic-reality test and declines to adopt a separate single-integrated-enterprise theory to impose FLSA liability on non-employing corporations |
| Discovery depositions of dismissed corporate defendants (protective order) | Plaintiffs sought Rule 30(b)(6) depositions of the four dismissed corporate defendants | Defendants moved to protect those entities from deposition after dismissal | Granted: protective order because the court dismissed claims against those corporate defendants |
Key Cases Cited
- Falk v. Brennan, 414 U.S. 190 (Sup. Ct.) (individual with substantial control may be an "employer" under FLSA)
- Darden v. Nationwide Mut. Ins. Co., 503 U.S. 318 (Sup. Ct.) (FLSA employer/employee definitions construed broadly)
- Schultz v. Capital Intern. Sec. Inc., 466 F.3d 298 (4th Cir.) (joint employer analysis and economic realities approach)
- Bonnette v. California Health & Welfare Agency, 704 F.2d 1465 (9th Cir.) (multi-factor test for employer status used by other circuits)
- McBurney v. Cuccinelli, 616 F.3d 393 (4th Cir.) (Article III standing elements reiterated)
- Cavallaro v. UMass Memorial Health Care, 971 F.Supp.2d 139 (D. Mass.) (similar facts; dismissal of non-employer entities for lack of standing)