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Pefanis v. Westway Diner

September 7, 2010

ANDREAS PEFANIS ON BEHALF OF HIMSELF AND OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
WESTWAY DINER, INC., DEFENDANT.



The opinion of the court was delivered by: Denise Cote, District Judge

OPINION & ORDER

On January 2, 2008, plaintiff Andreas Pefanis ("Pefanis") commenced this action against his former employer, defendant Westway Diner, Inc. ("Westway"), seeking to remedy violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201, et seq., and New York Labor Law ("NYLL"). The FLSA claims have been preliminarily approved for collective action pursuant to 28 U.S.C. § 216(b), and the NYLL claims have been certified as a class action pursuant to Rule 23, Fed. R. Civ. P. On May 3, 2010, following the close of discovery, Westway moved to "decertify" both the collective action and class action, or, in the alternative, for partial summary judgment. On June 4, Pefanis moved for leave to amend the first amended complaint. For the following reasons, Westway's motion for decertification and partial summary judgment is denied, and Pefanis' motion for leave to amend is granted.

BACKGROUND

The following facts are not in dispute. Westway owns and operates the Westway Diner, a restaurant located in midtown Manhattan. At all relevant times, Westway Diner was open twenty-four hours per day, seven days per week. Since 2003, Petros Dafnos ("Dafnos") has been the general manager of Westway Diner, and before that, was the night manager. In addition to management, Westway employs waiters, busboys, cashiers, and a host in the "front" of the restaurant, and a chef, prep cooks, grillmen, and dishwashers in the kitchen.

Dafnos was responsible for preparing Westway's payroll. Until November 2009, Westway did not maintain contemporaneous time records for its employees. In November 2009, nearly two years after the filing of this action, and approximately two months after the Rule 23 class action was certified, Westway began keeping daily records of the number of hours its employees worked using a time card system. Westway still does not, however, maintain contemporaneous records of employees' meal breaks, even though it deducts pay for meal breaks.

Pefanis was employed by Westway as a waiter from approximately November 2006 to November 2007, and opt-in plaintiff Salvador Peralta ("Peralta") was employed as a prep cook from approximately 1999 until April 2008.*fn1 Pefanis often worked over fifty hours per week and Peralta typically worked sixty hours per week.*fn2 Other waiters, dishwashers, grillmen, and busboys employed by Westway also generally worked over forty hours per week. In addition, Pefanis, Peralta, and other Westway employees oftentimes worked ten hours or more in a single day.

On January 2, 2008, Pefanis filed the original complaint in this action, asserting claims under the FLSA for unpaid minimum wage and overtime compensation. The complaint also asserted claims for unpaid minimum wage, overtime, and "spread of hours" pay pursuant to the New York Minimum Wage Act, N.Y. Lab. L. § 650, et seq., and the New York Spread of Hours Provision, N.Y. Lab. L. § 650, et seq. and N.Y. Comp. Code R. Regs. Tit. 12, § 137-1.7. On July 10, Pefanis filed the first amended complaint to allege that Westway had also made illegal deductions from employee pay in violation of N.Y. Lab. L. § 193.

On October 8, 2008, notice of Pefanis' FLSA minimum wage and overtime claims was authorized to be sent to other similarly situated Westway employees pursuant to 29 U.S.C. § 216(b). Pefanis v. Westway Diner, Inc., No. 08 Civ. 002(DLC), 2008 WL 4546526, at *1 (S.D.N.Y. Oct. 8, 2008) (the "October 2008 Opinion"). Court-approved notice was sent to all putative collective action members by first-class mail to their last-known addresses, which were provided by Westway. Peralta is the only other Westway employee that has opted into the FLSA action.

By Order dated August 7, 2009, the Court certified the NYLL minimum wage, overtime, spread of hours, and unlawful deductions claims as a class action pursuant to Rule 23(a) and (b)(3), Fed. R. Civ. P. The class definition includes "all service employees who worked at Westway since January 2, 2002 to the present, including all kitchen staff, servers, bussers, and runners." Court-approved notice was sent to all class members via first-class mail to their last-known addresses, which were provided by Westway. Notices sent to two employees, Sergio Reyes Latenche ("Latenche") and Hilario Cardoso ("Cardoso"), were returned as undeliverable.

After notice of the class action was sent, twenty-two of Westway's then-current employees, including Latenche and Cardoso, submitted exclusion request forms directly to Dafnos. After a hearing held on December 29, 2009, these exclusion request forms were invalidated based on a finding that the employees felt that they could "curry favor with their boss by opting out of the class" and that the opt-out pattern was "unreliable." Westway was ordered to post a curative notice in the workplace at Westway Diner and, on January 21, 2010, revised exclusion request forms were sent to employees who had opted out of the class action, including Cardoso and Latenche. Westway provided an updated address for Cardoso, but the notice sent to him was again returned as undeliverable. The notice sent to Latenche, who was still employed by Westway at the time, was also returned as undeliverable. Of the twenty-two employees to whom corrective notices were sent, fifteen opted-out of the class action. Latenche and Cardoso, however, did not opt out again.

Discovery closed on April 2. On April 30, Westway moved to "decertify" the collective action and class action, or, in the alternative, for partial summary judgment to redefine the Rule 23 class to exclude the fifteen employees who have opted out.

Westway also moved to exclude Latenche and Cardoso from the class. On May 21, plaintiffs filed their opposition. Westway did not file a reply.

On June 4, Pefanis moved for leave to amend the complaint to specify that the class will seek to recover liquidated damages on the NYLL claims. ...


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