297 F.R.D. 114
S.D.N.Y.2014Background
- Plaintiffs (former Megu Tribeca front-of-house employees) sued under the FLSA and NYLL alleging Defendants required tipped employees to share tips with non-service workers (sushi chefs, stockers, expeditors) and failed to pay overtime/minimum wage claims. Plaintiffs seek collective (29 U.S.C. § 216(b)) and Rule 23 class relief.
- Megu used a pooled-tip point system (points per position; ~$2.75/point) that historically included sushi chefs, stockers, and expeditors; parties dispute whether those positions had "more than de minimis" customer contact.
- Event coordinators received a portion of mandatory service charges for private parties; they did not participate in the restaurant’s daily tip pool but did book/plan events and act as host contacts.
- Defendants moved for summary judgment on multiple claims; Plaintiffs moved for conditional collective certification and Rule 23 class certification (NYLL claims). The court granted conditional collective certification, certified the NYLL class, granted some discrete summary-judgment requests, and denied the remainder.
- Court ordered dual notice (opt-in for FLSA, opt-out for NYLL), narrowed the collective/class to exclude current bussers and runners, authorized posting and a website, and directed production of putative class member contact data under a confidentiality protocol.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Conditional collective certification under 29 U.S.C. § 216(b) | Plaintiffs showed a common policy (tip pool including non-service employees) and met the lenient "modest factual showing" standard | Defendants claimed conflicts (current bussers/runners rotate into stocker/expediter roles) that preclude certification | Granted conditionally; court narrowed collective to exclude current bussers and runners and approved notice procedure |
| Rule 23 class certification (NYLL claims) | Common practices/policies regarding tip distribution create common questions; damages calculable classwide | Defendants argued individual consent/voluntariness and individualized damages calculations defeat predominance | Class certified under Rule 23(b)(3); Joseph & Kirschenbaum appointed class counsel |
| Summary judgment re: tip eligibility of sushi chefs, stockers, expeditors | Non-service positions were included improperly; plaintiffs offered evidence of minimal customer contact | Defendants said these positions regularly performed direct customer service (e.g., sushi-bar service, bussing/running duties) | For sushi chefs and stockers: summary judgment denied (genuine fact issues). For expeditors: FLSA claims barred by two-year statute; NYLL claims survive (six-year state statute) |
| Event coordinators' entitlement to service-charge shares | Event coordinators directly arrange/plan private parties and are the hosts’ contact — more than de minimis interaction | Defendants minimized coordinators’ customer contact during events and noted they were not in the tip pool | Summary judgment for Defendants denied as to tip-pool claims but granted for event coordinators: coordinators are tip-eligible / entitled to their portion of service charges |
| Minimum wage (NYLL Article 19) claim for difference between NY minimum and food-service minimum | Plaintiffs sought recovery under NY law for tip-pool practices | Defendants argued NY law permits tip allowances under Article 19; inclusion of ineligible employees does not, by itself, create a NY minimum-wage shortfall | Summary judgment for Defendants granted on NY minimum-wage claim (Plaintiffs did not allege wages fell below NY minimum) |
| Individual liability of corporate principals (Origuchi, Yokoyama, Picardi) | Plaintiffs argued individuals exercised control (hiring/firing, scheduling, pay) and thus qualify as "employers" under the economic-reality test | Defendants contended Origuchi lacked operational control and that corporate-officer civil liability is limited | Summary judgment denied as to individual liability: factual disputes remain (Origuchi shown to have exercised scheduling/pay authority; Yokoyama and Picardi acknowledged managers) |
Key Cases Cited
- Myers v. Hertz Corp., 624 F.3d 537 (2d Cir. 2010) (two-step approach for FLSA collective-certification/notice analysis)
- Shahriar v. Smith & Wollensky Rest. Grp., Inc., 659 F.3d 234 (2d Cir. 2011) (FLSA/NYLL tip-pool principles and commonality in restaurant cases)
- Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (U.S. 2011) (classwide common questions and the requirement that common contention be capable of resolution for all class members)
- Copantitla v. Fiskardo Estiatorio, Inc., 788 F. Supp. 2d 253 (S.D.N.Y. 2011) (employer cannot recover tips from employees who merely received improper tip distributions)
- Fasanelli v. Heartland Brewery, Inc., 516 F. Supp. 2d 317 (S.D.N.Y. 2007) (collective certification appropriate where restaurant employees allege same tip-policy violations)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary-judgment standard)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (genuine dispute and reasonable-jury standard for summary judgment)
- Comcast Corp. v. Behrend, 133 S. Ct. 1426 (U.S. 2013) (class predominance and link between liability model and damages methodology)
- Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132 (2d Cir. 1999) (economic-reality factors for determining FLSA employer status)
- Irizarry v. Catsimatidis, 722 F.3d 99 (2d Cir. 2013) (adoption of economic-reality test in this Circuit)