United States District Court, E.D. New York
ASHRAF HUSSAIN, on behalf of himself and all others similarly situated, Plaintiff,
BURTON AND DOYLE OF GREAT NECK LLC, MARIO SBARRO. and GENNARO SBARRO, Defendants.
MEMORANDUM AND ORDER
I. LOCKE, United States Magistrate Judge
of Complaint dated October 9, 2014, Plaintiff Ashraf Hussain
(“Hussain” or “Plaintiff”) commenced
this wage and hour action on behalf of himself and all others
similarly situated (collectively, “Plaintiffs”)
against Defendants 661 Northern Blvd, LLC, d/b/a Burton &
Doyle Steakhouse, Burton and Doyle of Great Neck LLC
(“Burton and Doyle LLC”), Mario Sbarro, Joseph
Zangri (“Zangri”), and Bert E. Brodsky, alleging
violations of the Fair Labor Standard Act
(“FLSA”), 29 U.S.C. § 201 et seq.,
and the New York Labor Law (“NYLL”), N.Y. Lab.
Law § 190 et seq. See Docket Entry
(“DE”) . Plaintiffs later filed an
Amended Complaint on November 17, 2015, which named as
defendants only Burton and Doyle LLC, Mario Sbarro
(“Sbarro”), and Gennaro Sbarro
“Defendants”). See DE . Presently
before the Court is Sbarro's motion for summary judgment
pursuant to Fed.R.Civ.P. 56 seeking dismissal of all claims
asserted against him on the basis that he was not
Plaintiffs' “employer” under the FLSA and the
NYLL. See DEs , . For the
reasons set forth herein, the Court denies Sbarro's
motion for summary judgment.
following facts are taken from court filings; the
parties' respective Local Rule 56.1 statements; and any
admissible deposition testimony, declarations, and exhibits.
Unless otherwise noted, the facts set forth herein are not in
were employed as waitstaff at Burton & Doyle Steakhouse
(“Burton and Doyle” or the
“Restaurant”)-a restaurant owned by Burton and
Doyle LLC once located at 661 Northern Boulevard in Great
Neck, New York-on or after October 9, 2011. See
Mario Sbarro's Statement of Undisputed Facts Pursuant to
Local Rule 56.1 (“Def.'s 56.1”), DE [101-13],
¶ 1; DE ; Electronic Order dated May 19, 2015.
Hussain, the collective action representative, worked as a
server at Burton and Doyle from January 2013 through July
2014. See Def.'s 56.1 ¶ 2. Plaintiff Donald
Bartunek (“Bartunek”), one of the 28 opt-in
Plaintiffs, was a waiter at the Restaurant. See Id.
and Doyle LLC is wholly owned by Mario Sbarro LLC,
see Pechman Decl., Ex. 8, and the Mario Sbarro
(2006) Long Term Trust (the “Trust”) is the sole
member of Mario Sbarro LLC, see Declaration of
Stuart M. Steinberg in Support of Motion by Mario Sbarro for
Summary Judgment (“Steinberg Decl.”), DE ,
Ex. L. Mario Sbarro LLC was incorporated on June 29, 2006,
and the Trust was established by Sbarro, as Settlor, on the
following day, June 30, 2006. See Pl.'s 56.1
¶ 127; Def.'s 56.1 ¶ 117. Blue Ridge Bank and
Trust Co. (“Blue Ridge”) is the Independent
Trustee of the Trust. See Id. ¶ 116.
Sbarro LLC's Amended and Restated Operating Agreement
dated June 30, 2006 (the “Operating Agreement”)
identifies Mario Sbarro as the company's sole member.
See Pechman Decl., Ex. 1. Under the terms of the
Operating Agreement, the sole member has “authority to
take any and all actions on behalf of the [c]ompany,
including without limitation to authorize, consent to[, ] and
otherwise effectuate the [c]ompany's intended business
activities, and all lawful activities the [c]ompany may
engage [sic] approved by the [sole]
[m]emeber.” Id. § 1(a). The Operating
Agreement further provides that Sbarro “shall serve as
Managing Director and Manager of [Mario Sbarro LLC] with full
authority to act on behalf of the [c]ompany in all business
matters and other matters as he, in his sole discretion,
deems to be in the best interests of the [c]ompany, ”
and as “Administrative Officer of the [c]ompany with
authority to sign such certificates, documents[, ] and
instruments as may be necessary for tax purposes on behalf of
the [c]ompany to qualify the [c]ompany to conduct business
activities in any jurisdiction, to provide licenses, permits
and approvals as may be necessary for the conduct of the
[c]ompany's activities . . . .” Id.
§§ 2(a), (b). Moreover, the Operating Agreement
states that Sbarro shall hold these positions “until
his . . . death or until he . . . shall resign . . . .”
Id. § 2.
Trust identifies Joseph Sbarro as the “Manager”
with sole authority to vote any equity interests held or
acquired by the Trust. See Pechman Decl., Ex. 15 at
19-20. However, the Trust's terms also give Mario Sbarro
the authority “to remove any Manager from time to time
and/or to designate additional and/or successor Managers
(other than the Settlor).” Id. at 22.
the Restaurant opened, Sbarro, Inc.-an entity of which Sbarro
at one time served as the chief executive officer-operated a
restaurant named Salute also located at 661 Northern
Boulevard. See Def.'s 56.1 ¶¶
52, 53; Pechman Decl., Ex. 2, 18:21-19:9. According to
Sbarro's deposition testimony, Sbarro, Inc. was the sole
owner of Salute. See Declaration of Laurie Sayevich
Horz in Support of Motion by Mario Sbarro for Summary
Judgment (“Horz Decl.”), DE , Ex. D,
15:25-16:7. Sbarro further testified that, when Salute
“wasn't doing well, ” he and his partners
“thought that perhaps a steakhouse might be
better.” Pechman Decl., Ex. 2, 20:5-9. As a result, in
approximately 1998, Salute was “transition[ed]”
from Salute to Burton and Doyle. Id., 19:24-20:4. At
or around that time, Sbarro was involved in the decision to
add a sushi bar to the Restaurant. See
Plaintiffs' Rule 56.1 Counter-Statement of Undisputed
Material Facts (“Pl.'s 56.1”), DE [108-17],
¶ 126. On April 7, 1999, a New York State Liquor License
for Burton and Doyle was issued to Sbarro as
“Principal” and remained active until June 30,
2015. See Horz Decl., Ex. J; Pl.'s 56.1 ¶
125. Following the “transition” from Salute to
Burton and Doyle, Sbarro, Inc. owned 40% of the Restaurant,
and Anthony Scotto Company and Sal Moscato owned the
remaining 60%. Pechman Decl., Ex. 2, 16:3-10, 21:10-22:6.
Sometime thereafter, “the family” sold Sbarro,
Inc. and ownership of the Restaurant “went to
[Sbarro's] brother, Anthony, who later decided to
sell” “these assets” to the Trust.
Id., Ex. 2, 16:22-17:10. It appears that this sale
of assets was effectuated through a Member Share Purchase
Agreement dated June 29, 2008, pursuant to which all shares
of Burton and Doyle LLC were transferred to Mario Sbarro LLC.
See Pechman Decl., Ex. 8.
2009, Sbarro asked Gennaro to serve as General Manager at the
Restaurant in an effort to improve its operations.
See Pl.'s 56.1 ¶ 134. The two discussed the
amount of time and compensation involved in taking on the
position and agreed that Gennaro's compensation would be
contingent on whether the Restaurant became profitable.
See Id. ¶¶ 135, 136. They did not,
however, “go into specifics” about Gennaro's
responsibilities as General Manager. See Id. ¶
137. According to Sbarro's testimony, after Gennaro
assumed the General Manager role, he would
“occasionally . . . ask [Sbarro] a question”
about the Restaurant's operations. Pechman Decl., Ex. 2,
38:3-11. In addition, Sbarro “would go there once in a
while, ” approximately every one to two months, as a
“guest.” Id., 38:11-12; Pl.'s 56.1
¶ 139; Def.'s 56.1 ¶ 68. In connection with
such visits, Sbarro would tell Gennaro if he was
“happy” or “unhappy” about the
Restaurant's food quality, sanitation, and cleanliness.
See id., 38:11-17. During his deposition, Gennaro
confirmed that he spoke with Sbarro about how the Restaurant
was doing. See Pechman Decl., Ex. 3, 17:2-6;
Pl.'s 56.1 ¶ 142. For example, on one occasion
Gennaro told Sbarro that the Restaurant was struggling but
that it had prospects. See Pl.'s 56.1 ¶
143. Sbarro was also aware that the Restaurant was never
profitable. See Id. ¶ 145.
and Bartunek each encountered Sbarro at the Restaurant on
several occasions. It is undisputed that, at Sbarro's
request, Gennaro directed Hussain to fix the curtains in the
Restaurant “to make sure th[e] place looked a little
more bright.” Pechman Decl., Ex. 4, 163:16-24;
Pl.'s 56.1 ¶ 160. Further, Hussain twice observed
Sbarro “go[ing] to the office in the basement” of
the Restaurant. Pechman Decl., Ex. 4, 168:14-169:4. A number
of times, Bartunek waited on Sbarro when he dined at the
Restaurant. Pl.'s 56.1 ¶ 140. According to Bartunek,
Sbarro would never receive a bill for his meals. Pechman
Decl., Ex. 5, 142:14-19. Additionally, Bartunek observed
Sbarro “walking around pointing things out” at
the Restaurant before his shift. Pl.'s 56.1 ¶ 156.
Bartunek also testified that Sbarro was present in the
Restaurant during employee meetings that took place before
the employees' shifts. Pechman Decl., Ex. 5,
130:7-131:24, 127:16-21; Pl.'s 56.1 ¶ 164. If
employees complained to a manager about a work-related issue,
the manager informed them that he would speak to the owner of
the restaurant. See Pl.'s 56.1 ¶ 166. Both
Hussain and Bartunek understood Sbarro to be the owner of the
Restaurant. See Pechman Decl., Ex. 4, 172:18-22;
Pechman Decl., Ex. 5, 140:5-14.
around 2014, Sbarro's daughter Carmela Merendino
(“Merendino”), who was handling accounts payable
at the time, reported to Sbarro that the Restaurant was
running in arrears and was getting worse each month.
See Pl.'s 56.1 ¶ 170; Pechman Decl., Ex. 2,
26:20-25. As a result, Sbarro informed Frank Montgomery
(“Montgomery”), the attorney for the Trust, that
it was a good idea to sell the Restaurant because it was not
profitable. See Pl.'s 56.1 ¶ 171. Sbarro
had multiple conversations with Merendino regarding the
Burton and Doyle's financial condition and the potential
sale of the business. See Id. ¶ 172. It is thus
undisputed that Sbarro knew the business was not doing well.
See Id. ¶ 173. Consequently, Sbarro negotiated
the sale of the Restaurant to Zangri with the assistance of
broker Charles Navarro of Breslin Realty for $2.5 million.
See Id. ¶ 177. Sbarro never discussed the sale
with Gennaro, nor was Gennaro otherwise involved in the sale.
See Id. ¶ 167, 174. Rather, Gennaro was given
36 hours' notice by Merendino that the Restaurant had
been sold and that they had to do an inventory and close up.
See Id. ¶ 167. On June 27, 2014,
Newsday published an article regarding the sale that
identified Sbarro as the owner and operator of Burton and
Doyle. See Pechman Decl., Ex. 11. Breslin Realty
then issued a press release on July 14, 2014, which also
suggested that the Restaurant had been owned and operated by
Sbarro. See id., Ex. 10.
Summary Judgment Standard
to Fed.R.Civ.P. 56, a “court shall grant summary
judgment if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed.R.Civ.P. 56(a). The
movant bears the burden of establishing that there are no
issues of material fact such that summary judgment is
appropriate. See Huminski v. Corsones, 396 F.3d 53,
69 (2d Cir. 2004). In deciding a motion for summary judgment,
the court “is not to weigh the evidence but is instead
required to view the evidence in the light most favorable to
the party opposing summary judgment, to draw all reasonable
inferences in favor of that party, and to eschew credibility
assessments.” Amnesty Am. v. Town of West
Hartford, 361 F.3d 113, 122 (2d Cir. 2004); see also
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