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Salinas v. Starjem Rest. Corp. - 123 F. Supp. 3d 442 (S.D.N.Y. 2015)

Rule:

An individual may be held liable under theFair Labor Standards Act (FLSA) if she is an "employer," which the statute defines as "any person acting directly or indirectly in the interest of an employer in relation to an employee."

Facts:

In the present action, plaintiffs, current and former employees of the restaurant known as Fresco by Scotto, alleged that Defendants, Starjem Restaurant Corp. (d/b/a Fresco by Scotto), Marion Scotto, and Anthony Scotto, violated the Fair Labor Standards Act (FLSA) by: (i) improperly taking a tip credit against plaintiffs’ wages; (ii) failing to pay plaintiffs for all hours worked; (iii) failing to provide plaintiffs written notices and wage statements compliant with  N.Y. Lab. Law § 195; (iv) wrongly requiring plaintiffs to cover the costs of uniforms and crumbers; and (v) failing to pay plaintiffs the “spread of hours” premium mandated by the New York Commissioner of Labor’s Minimum Wage Order.

Issue:

Were the defendants, individuals who were the principals in running a restaurant, liable for violation of Fair Labor Standards Act?

Answer:

Yes.

Conclusion:

The Court held that the defendants violated the Fair Labor Standards Act. The Court found that the defendants were not entitled to take a tip credit against plaintiffs’ wages under the FLSA prior to July 2012. According to the Court, an employer was required to furnish to the employee a statement with every payment of wages listing allowances claimed as part of the minimum wage.  The written notices that defendants provided beginning in March 2011 did not adequately apprise plaintiffs of the tip credit provision. Moreover, the Court noted that in order to establish liability on a claim for underpayment of wages, a plaintiff must prove that he performed work for which he was not properly compensated, and that the employer had actual or constructive knowledge of that work. Where an employer failed to maintain adequate or accurate records of its employees’ hours, the employee need only to produce sufficient evidence to show the amount and extent of the uncompensated work as a matter of just and reasonable inference. Here, defendants did not keep records of plaintiffs’ exact hours prior to June 26, 2011. The Court then credited plaintiffs’ estimates, and concluded that defendants did not compensate plaintiffs for all hours worked during the relevant period. The Court further found that the defendants failed to provide plaintiffs written notices and wage statements compliant with NYLL § 195. For these reasons, the Court concluded that plaintiffs have proven, by a preponderance of the evidence, that defendants violated the FLSA.

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