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Sanchez v. El Rancho Sports Bar Corp.

United States District Court, S.D. New York

May 13, 2014

FRANCISCA SANCHEZ, MARYA MORGADO, MARIA REYES, and LETICIA ZACATZONTLE, individually and on behalf of others similarly situated, Plaintiffs,


RONNIE ABRAMS, District Judge.

Plaintiffs bring this action, individually and on behalf of all others similarly situated, against Defendants El Rancho Sports Bar Corporation ("El Rancho"), Raul Ortega, and Araceli Ortega, claiming violations of the federal Fair Labor Standards Act ("FLSA") and provisions of New York State Labor Law ("NYLL"). Plaintiffs move for (1) conditional certification of a collective action pursuant to § 216(b) of the FLSA; (2) court-facilitated notice to all potential collective action members; (3) equitable tolling of the statute of limitations until the end of the opt-in period; (4) an order that Defendants produce the names and personal information of all potential collective action members; and (5) an order that Defendants post the approved notice in their place of business. For the reasons set forth below, Plaintiff's motion is granted in part and denied in part.


The business at issue is a restaurant and Spanish dance club ("the Restaurant"). (Second Am. Compl. ¶¶ 9-10.) Named Plaintiffs Francisca Sanchez and Marya Morgado both worked as waitresses at the Restaurant.[1] (Sanchez Decl. ¶ 2; Morgado Decl. ¶¶ 2, 18.) They assert that individual Defendants Raul Ortega and Araceli Ortega were and continue to be managers of the Restaurant at all relevant times and that they created and enforced the policies at issue. (Second Am. Compl. ¶¶ 15, 20-22, 26.) According to Plaintiffs, corporate Defendant El Rancho purchased the Restaurant from Los 2 Potrillo Restaurant Corporation in 2011, retained most of the same employees, and proceeded to operate the Restaurant "in substantial continuity." (Id. ¶¶ 11, 13, 15-19.) Plaintiffs assert that El Rancho is liable for Los 2 Potrillo's past violations of labor laws as its corporate successor in interest. (Reply at 6-7.)

Plaintiffs allege that, while they were working at the Restaurant, Defendants committed numerous violations of state and federal labor laws. (Second Am. Compl. ¶¶ 27-30.) Among other claims, they assert that Defendants failed to compensate them for all hours worked at the minimum wage and failed to pay overtime compensation, as required by the FLSA. (Id. ¶¶ 27(i)-(ii); Mem. of Law at 1.)


I. Conditional Certification of the Collective Action

A. The Standard for Conditional Certification

The Second Circuit has approved a two-step process for conditionally certifying a collective action pursuant to § 216(b) of the FLSA. See, e.g., Myers v. Hertz Corp., 624 F.3d 537, 554-55 (2d Cir.2010). At the first step, the Court determines whether the potential opt-in plaintiffs "may be similarly situated' to the named plaintiffs with respect to whether a FLSA violation has occurred." Id. at 555. Plaintiffs' burden at this stage is "minimal." See Lynch v. United Servs. Auto. Ass'n, 491 F.Supp.2d 357, 368 (S.D.N.Y. 2007). They need only "mak[e] 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." Hoffmann v. Sbarro, Inc., 982 F.Supp. 249, 261 (S.D.N.Y. 1997). Plaintiffs must show "a factual nexus between their situation and the situation of other current and former [employees] sufficient to determine that they are similarly situated.'" Id. at 262.

At the second step, once the potential plaintiffs have opted in and discovery is finished, courts perform a more rigorous analysis to determine whether the new plaintiffs are in fact similarly situated to the original plaintiffs. See Damassia v. Duane Reade, Inc., No. 04 Civ. 8819 (GEL), 2006 WL 2853971, at *3 (S.D.N.Y. Oct. 5, 2006) ("After discovery, courts typically engage in a second tier' of analysis to determine on a full record - and under a more stringent standard - whether the additional plaintiffs are in fact similarly situated."). At that stage, the collective action may be de-certified if it has been shown that the new plaintiffs are not similarly situated to the original, named plaintiffs. See Myers, 624 F.3d at 555.

B. Conditional Certification of this Collective Action

Plaintiffs assert that Defendants had a "common plan or scheme" that violated the FLSA as to the waitresses and dancers who worked at the Restaurant. (Mem. of Law at 1.) Defendants object to certification of Plaintiffs' overtime-compensation claims and further object to including dancers in the collective action. (Opp'n at 6-8.)

Plaintiffs have made the modest factual showing required to establish that they are similarly situated to the waitresses and dancers. Sanchez and Morgado assert in their declarations that they and all of the waitresses and dancers were paid a flat daily salary regardless of how many hours they worked. (Sanchez Decl. ¶¶ 3-6, 8-10; Morgado Decl. ¶¶ 6-8.) According to Sanchez, the waitresses and the dancers received an hourly rate of compensation below the federal minimum wage of $7.25 per hour. See 29 U.S.C. § 206(a)(1)(C). (Sanchez Decl. ¶¶ 3, 5-6, 8-10.) In addition, they allege that Defendants had no system for recording the number of hours that any of the employees worked, and that the waitresses regularly worked more than forty hours in a week. (Sanchez Decl. ¶¶ 3-4, 6-7; Morgado Decl. ¶¶ 6-7, 15.)

Plaintiffs also describe how Defendants allegedly reduced the pay of waitresses and dancers. They assert that waitresses and dancers were required to earn "tickets" each night by persuading customers to buy them drinks. (Sanchez Decl. ¶¶ 16-18; Morgado Decl. ¶¶ 9-10, 12.) If they did not receive ten tickets in a night, then they were not paid for the entire day. (Sanchez Decl. ¶¶ 16, 18; Morgado Decl. ¶¶ 9, 11.) In addition, Defendants allegedly deducted $15.00 per day ...

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