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Alvarado v. Five Towns Car Wash, Inc.

United States District Court, E.D. New York

September 19, 2014

FIVE TOWNS CAR WASH, INC., et al., Defendants.


RAYMOND J. DEARIE, District Judge.

Plaintiff Leonzo Joaquin Constanza Alvarado moves for partial summary judgment against defendants Five Towns Car Wash, Inc. ("Five Towns") and William Brown on the issue of whether defendants could properly avail themselves of the so-called tip credit under the Fair Labor Standards Act of 1938 ("FLSA") and an analogous provision of the New York Labor Law ("NYLL"). See 29 U.S.C. § 203(m); N.Y. Lab. Law§ 196-d; See generally Shahriar v. Smith & Wollensky Rest. Grp., Inc., 659 F.3d 234, 239-40 (2d Cir. 2011) (explaining conditions under which an employer may apply the tip credit to employee wages under the FLSA); Barenboim v. Starbucks Corp., 21 N.Y.3d 460, 469-73 (2013) (explaining application of the tip credit under the NYLL). The Court heard argument on the motion on September 18, 2014. Jury selection is set to begin on September 22nd. We will be correspondingly brief.

In determining whether a genuine issue of material fact precludes summary judgment, we view the evidence in the light most favorable to the non-moving parties. Esmilla v. Cosmopolitan Club, 936 F.Supp.2d 229, 237 (S.D.N.Y. 2013) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). Moreover, we draw all reasonable inferences and resolve all ambiguities in favor of the non-moving parties. Callari v. Blackman Plumbing Supply, Inc., 988 F.Supp.2d 261, 275 (E.D.N.Y. 2013) (citing Anderson, 477 U.S. at 247-48). Properly applied, that indulgent standard precludes summary judgment here. Alvarado has done an admirable job drawing out certain inconsistencies between Brown's testimony, his own testimony, and the testimony offered by three employees whom Alvarado claims improperly shared tips: Luciano Alfaro, Herman Heeraman ("Terry"), and Sahil Sood. But genuine - in some instances, closely contested - disputes of material fact remain.

In principle, the Court can sometimes settle the economic reality test on a motion for summary judgment, because the ultimate question of whether a supervisor acts as an employer when sharing tips is a question of law. Cf. Zheng v. Liberty Apparel Co. Inc., 355 F.3d 61, 76 (2d Cir. 2003) (economic reality test presents a mixed question of law and fact in which historical facts underlie the weight afforded to each factor, which in turn drives the ultimate conclusion of law). But we cannot say that either Alfaro, Terry, or Sood acted with the degree of authority and control required to impute their sharing in tips to Brown and Five Towns, at least not based on the historical facts that are undisputed, such as the fact that all three supervised other employees to ensure they washed and detailed the cars properly. The Court does not make too much of the fact that Sood evidently prepared payroll forms, given that his role appears to have required little more than inputting hours and calculating wages based on the rate set by Brown. See Widjaja v. Kang Yue USA Com., 2011 WL 4460642, at *4 (E.D.N.Y. Sep. 26, 2011) ("[F]actors governing the determination include... analyzing payroll and [other] costs[.]") (emphasis added). Similarly, the fact that Terry drew a salary, although an important factor, is insufficient standing alone to establish his status as an employer. See Ayres v. 127 Rest. Corp., 12 F.Supp.2d 305, 308 (S.D.N.Y. 1998) (concluding that manager became employer for purposes of tip credit not only because he began drawing salary, but because he "gained full authority' to suspend or terminate employees... made hiring decisions... [and] assumed greater responsibility for the restaurant's budget.")

We might conclude that Alfaro, Terry, or Sood acted as Alvarado's employer for purposes of the tip credit if Alvarado had conclusively dispelled any genuine dispute of fact on whether any one of those three supervisors had durable power to hire and fire. See Widjaja, 2011 WL 4460642, at *4 ("The most significant factor in determining whether a person is an employer' is the power to hire, fire, or discipline other employees."). But, although Alvarado has identified some equivocation by Brown with respect to Terry, he has not yet made that showing. Not in light of the following extended testimony from Brown:

Q: Besides you, did anyone else ever fire anyone at the car wash?
A: It's possible Terry might have let somebody go, but it would likely be me.
Q: Other than Terry, anyone else fire anyone that you know?
A: Not that I'm aware of.
Q: What about hiring? Do you know if anyone other than you hired anyone at the car wash?
A: Terry might have hired somebody, but he would call me up and get my okay.
Q: Did Terry ever hire somebody without calling you first?
A: No, not that I'm aware of.

(Brown Dep. 23, filed at Brown Decl. Ex. C, ECF No. 39-3). Whatever Terry's role in hiring and firing employees (his exact role remains unclear), this testimony ...

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