Grosscup v. KPW Management, Inc.

261 F. Supp. 3d 867
CourtDistrict Court, N.D. Illinois
DecidedJune 7, 2017
DocketNo. 16 C 06501
StatusPublished
Cited by32 cases

This text of 261 F. Supp. 3d 867 (Grosscup v. KPW Management, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grosscup v. KPW Management, Inc., 261 F. Supp. 3d 867 (N.D. Ill. 2017).

Opinion

MEMORANDUM OPINION AND ORDER

John J. Tharp, Jr., United States District Judge

In this case under the Fair Labor Standards Act, the named plaintiffs Lindsay Grosscup and the prospective opt-in plaintiffs (collectively, the “plaintiffs”)—servers and bartenders at the defendants’ franchised Buffalo Wild Wings (“BWW”) restaurants in Illinois and Maryland—allege that they were unlawfully paid below-minimum, tip-credited hourly wages while (1) they performed excessive amounts of non-tipped work related to their jobs; and (2) they were required to perform duties unrelated to their jobs. They also allege that they were denied the statutory right to retain all of their tips when they were forced to pay for customer walkouts and cash shortages from their tips. The plaintiffs now move for conditional certification of a collective action and for authorization to issue step-one notice to prospective opt-in members. See 29 U.S.C. § 216(b). The defendants oppose the motion on the ground that the plaintiffs have not made the preliminary showing of the existence of a common unlawful policy or practice as to any of the FLSA violations they allege.

BACKGROUND

A. Collective Actions

Section 16(b) of the FLSA, 29 U.S.C. § 216(b) authorizes employees to act together to seek redress for violations of the minimum wage and maximum hour provisions of 29 U.S.C. §§ 206 and 207. Ervin v. OS Rest. Servs., Inc., 632 F.3d 971, 974 (7th Cir. 2011); see Schaefer v. Walker Bros. Enterprises, 829 F.3d 551, 553 (7th Cir. 2016) (“Suits under the Fair Labor Standards Act cannot proceed as class actions. Instead they are opt-in representative actions.”); Alvarez v. City of Chicago, 605 F.3d 445, 448 (7th Cir. 2010). “The conditional approval process is a mechanism used by district courts to establish whether potential plaintiffs in the FLSA collective action should be sent a notice of their eligibility to participate and given the opportunity to opt in to the collective action.” Ervin, 632 F.3d at 974. Here, the plaintiffs seek to give notice to all servers and bartenders who worked at any of the defendants’ BWW restaurants in Illinois or Maryland in the three years preceding the complaint of their ability to opt into the collective' action. See Pis. Mot. ¶ 1-2, ECF No. 21; 29 U.S.C. § 216(b) (opt-in requirement).

. “Neither Congress nor the Seventh Circuit has specified the procedure courts should use to decide FLSA certification and notice issues, but collective FLSA actions in this district generally [870]*870proceed under a. two-step process.” Salmans v. Byron Udell & Assocs., Inc., No. 12 C 3452, 2013 WL 707992, at *2 (N.D. Ill. Feb. 26, 2013); Ballou v. iTalk, LLC, No. 11 C 8465, 2013 WL 3944193, at *3 (N.D. Ill. July 31, 201J). First, the plaintiffs have the burden of showing that there are other similarly situated employees who are potential’ claimants. Salmans, 2013 , WL 707992, at *2. The plaintiffs must make .a modest factual showing sufficient to demonstrate that they and potential plaintiffs together were victims of a common policy or plan that violated the law. Id. Bergman v. Kindred Healthcare, Inc., 949 F.Supp.2d 852, 855 (N.D. Ill. 2013) (“At this stage of -the proceedings, plaintiffs must make a modest factual showing of common, unlawful conduct and provide some indication of harm to employees.”). Courts use a “lenient interpretation” of the term “similarly situated” in deciding whether plaintiffs meet this burden. Salmans, 2013 WL 707992, at *2 (quoting Jirak v. Abbott Labs., Inc., 566 F.Supp.2d 845, 848 (N.D. Ill. 2008)). “There is a low standard of proof.” Bergman, 949 F.Supp.2d 852, 855 (N.D. Ill. 2013). If the plaintiffs are able to show that other potential plaintiffs are similarly situated, courts may conditionally certify the case as a collective action and allow the plaintiffs to send notice of the case to similarly situated employees who may then opt'in as plaintiffs. Salmans, 2013 WL 707992, at *2; Ballou, 2013 WL 3944193, at *3.

The second, step, occurring after the opt-in and discovery process has been completed, is more stringent. Once it is known which employees will be part of the collective, the Court must reevaluate the conditional certification to determine whether there is sufficient similarity between the named and opt-in plaintiffs to allow the matter to proceed to trial on a collective basis. Salmans, 2013 WL 707992, at *2; Nehmelman v. Penn Nat. Gaming, Inc., 822 F.Supp.2d 745, 751 (N.D. Ill. 2011). “If the court finds insufficient similarities during the , second step, it may revoke conditional certification or divide the class into subclasses.” Sylvester v. Wintrust Financial Corporation, 2013 WL 5433593, at *3 (N.D.Ill. Sept. 30, 2013).

B. The FLSA Standards for Tipped Work

Under the FLSA, an employer may pay a tipped employee less than minimum wage—the employer takes a so-called “tip credit”—but if the tips, in combination with the below-minimum-wage hourly rate, do not add up to the minimum wage, the employer has to make up the difference. 29 U.S.C. § 203(m); Soto v. Wings 'R Us Romeoville, Inc., No. 15-CV-10127, 2016 WL 4701444, at *2 (N.D. Ill. Sept. 8, 2016). There are two ways in which an employer can violate the tip-credit provisions of the FLSA. First, if the employer fails to pay the minimum wage for any time spent on duties that are not “related!’ to an employee’s occupation, there is a violation. It is also unlawful for the employer to pay the tip-credited wage to an employee who spends excessive time on non-tipped work, even if that work is “related” to the occupation. The Department of Labor has interpreted this to mean 20% or. more of the employee’s working hours. This Court will refer to the first kind of violation as a “dual jobs” violation and the second as an “excessive side work” (the industry term for the duties attendant to serving food and drink) violation.

The FLSA- , statute .itself does'not prescribe these two separate kinds of violations but the attendant regulation (29 C.F.R. § 531.56(e)), Chapter 30 of the Labor Department’s Field Operations Handbook (the “FOH,” see https://www.dol.gov/ whd/FOH/FOH_Ch3Q.pdf), and countless court decisions have recognized both. The relevant regulation is the “dual jobs” provision in 29 C.F.R. § 531.56(e):

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Bluebook (online)
261 F. Supp. 3d 867, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grosscup-v-kpw-management-inc-ilnd-2017.