Salinas v. Starjem Restaurant Corp.
123 F. Supp. 3d 442
S.D.N.Y.2015Background
- Fresco by Scotto employed numerous bussers, runners, barbacks, stockers, and coffee personnel; the restaurant and individual defendants Starjem Restaurant Corp. and Anthony Scotto are sued under the FLSA and NYLL for wage and hour violations, tip credits, and related matters.
- Pre-2011 compensation relied on shift pay rather than exact hours; timekeeping and payroll were later aligned to a punch-in system starting June 26, 2011, though undercounting by about 19 minutes per shift was identified.
- Plaintiffs allege improper tip credits, failure to provide proper notices and wage statements, and costs for uniforms and crumbers not reimbursed.
- Testimony and documentary evidence were used to assess which employees were tip-eligible and whether managers participated in tip pools or shared in tips.
- The court concluded Marion Scotto is not an employer under the FLSA/NYLL; the case proceeded to damages phase for found violations and liability against Starjem and Anthony Scotto.
- Uniform costs and crumbers purchases were deemed reimbursable as “uniforms/tools of the trade” under NY and federal law; family meal and non-tipped work time were evaluated for proper wage calculation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Marion Scotto is an employer under the FLSA/NYLL | Plaintiffs argue Marion Scotto controlled employment decisions. | Defendants contend she lacked direct control over employment or compensation. | Marion Scotto is not an employer under the FLSA/NYLL. |
| Whether tip credits could be taken pre-July 2012 | Tip credits were not properly communicated to employees and notices were English-only. | Defendants claim sufficient notice and compliance. | Tip credit not proper before July 2012; notices and language deficiencies noncompliant. |
| Whether employees improperly shared tips with tip-ineligible personnel (including managers) | Tip pool included non-service staff and managers, violating NYLL §196-d and 29 U.S.C. §203(m). | Some individuals had meaningful authority but were not properly categorized; service charges complicate the issue. | Stockers, coffee preparer (when assisted) and certain managers were tip-ineligible; sharing with them violated NYLL/FSLA for periods before 2011; post-2011 administrationFee not a gratuity. |
| Whether defendants underpaid for all hours worked and misrecorded hours | Time records show undercompensation before 6/26/2011 and undercounting post-7/1/2011; some shifts not punched. | Timekeeping was substantially accurate; occasional unpunched shifts were isolated. | Willful underpayment before 6/26/2011; undercounting approximately 19 minutes per shift after 7/1/2011; damages awarded under Anderson/Kuebel framework. |
| Whether uniforms and crumbers costs were recoverable | Employees paid out-of-pocket for shirts, ties, crumbers, collar stays and cravats. | Some items are ordinary clothing; others are uniforms; costs partially reimbursable. | Uniforms (ties/shirts) treated as uniforms; crumbers as tools of the trade; defendants liable for costs. |
Key Cases Cited
- Irizarry v. Catsimatidis, 722 F.3d 99 (2d Cir.2013) (economic reality test for employer status under FLSA/ NYLL)
- Copantitla v. Fiskardo Estiatorio, Inc., 788 F.Supp.2d 253 (S.D.N.Y.2011) (tip credit notice requirements; English notices insufficient for Spanish speakers)
- Barenboim v. Starbucks Corp., 698 F.3d 104 (2d Cir.2012) (meaningful authority and tip-ineligibility of managers under NYLL; service charges not tips for FLSA)
- Sami— Maldonado v. BTB Events & Celebrations, Inc., 990 F.Supp.2d 382 (S.D.N.Y.2013) (service charges and gratuity analysis under NYLL)
- Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 ((U.S. 1946)) (burden-shifting framework for unpaid wages when records are inadequate)
- Kuebel v. Black & Decker Inc., 643 F.3d 352 (2d Cir.2011) (burden of proving hours worked; shift to employer for precise figures)
- Nakahata v. New York-Presbyterian Healthcare Sys., Inc., 723 F.3d 192 (2d Cir.2013) (definition of overtime and wage calculations under NY law)
- Hart v. Rick’s Cabaret Int’l, Inc., 60 F.Supp.3d 447 (S.D.N.Y.2014) (non-double counting; meal periods and non-tipped work)