By Gerald L. Maatman, Jr., Jennifer A. Riley, and Gregory S. Slotnick
Duane Morris Takeaways: On September 25, 2023, Judge Colleen McMahon of the U.S. District Court for the Southern District of New York District granted conditional certification of a collective class under the Fair Labor Standards Act (“FLSA”) in Ademi v. Central Park Boathouse, LLC et al., No. 22 Civ. 8535 (S.D.N.Y. Sept. 25, 2023). In its order, the Court found that one single affidavit, submitted by a long-tenured named employee, provided allegations sufficient to grant his request to conditionally certify the collective action. Employers in the Second Circuit (i.e., New York, Connecticut, and Vermont) should note the extremely minimal burden workers are required to meet at the conditional certification stage of a wage & hour lawsuit, as granting certification based on a single declaration is at the low end of the spectrum as certifications rulings go. The case also serves as the latest reminder for businesses to ensure their wage & hour practices and compliance are up to date given the ever-changing landscape and evolving federal, state, and local rules and regulations concerning wage & hour issues.
Case Background
Plaintiff, a former long-tenured server who worked at the Central Park Boathouse (the “Boathouse”) from approximately January 2011 through October 16, 2022, filed a complaint on behalf of himself and all current and former front-of-the-house tipped employees (captains, assistants, bartenders, bussers, runners, and servers) employed at the Boathouse within the last six years. In the complaint, the worker sought to recover unpaid wages (including overtime) due to an invalid tip credit policy, unreimbursed costs for maintenance of uniforms, and unpaid wages due to improper meal credit deductions in violation of the FLSA and the New York Labor Law (“NYLL”), as well as failure to provide proper wage statements under the NYLL. Plaintiff also brought a claim for unlawful retaliation against him in violation of both laws, and all claims were filed against the Boathouse and its former owner and operator. Id. at 1.
Plaintiff claimed that he was regularly scheduled to work seven hours a day, five days per week, but also regularly worked two or three double-shifts per week, totaling approximately 49 to 56 hours worked per week. Id. at 3. Plaintiff’s declaration included a list of the first (but not last) names of six other servers also allegedly scheduled to work similar hours and shifts, and he claimed there were additional names of other workers as well. Id. Plaintiff asserted that the Boathouse paid tipped front-of-the-house employees tip-credited wages without providing them notice that tip credits would be taken against their wages. Id. at 4. The complaint claimed the Boathouse thus paid the tipped employees below the New York minimum and overtime rate based on the tip credit, and attached paystubs generated between 2016 and 2020 confirming such rates. Id. Plaintiff claimed he personally observed and discussed the Boathouse paying below the required minimum amounts with named and unnamed co-workers. The Complaint also alleged the Boathouse maintained a tip credit policy despite requiring tipped workers spend more than 20% of their total weekly hours performing non-tipped work and required the workers to maintain their own uniforms without proper cost reimbursement to offset cleaning costs. Id. at 4-5. Finally, Plaintiff alleged the restaurant improperly deducted meal credits from wages of all tipped front-of-house employees for meals that often made coworkers sick and often consisted of unsold chicken and seafood leftovers. Id. at 5.
On March 23, 2023, Plaintiff filed a motion for conditional certification of a collective action under the FLSA, seeking the Court also allow mailing out notice of the opportunity to join the case to all putative opt-in plaintiffs. Id. at 2.
The Order Granting Conditional Certification
In its decision, the Court noted that in assessing whether a plaintiff is “similarly situated” to employees the plaintiff seeks to represent, courts look to the pleadings, affidavits, and declarations, but often authorize notice at the conditional certification stage based “solely on the personal observations of one plaintiff’s affidavit.” Id. at 9. The Court confirmed that at the conditional certification stage (the first of a two-step process for certifying a collective action in the Second Circuit), courts do not resolve factual disputes or weigh the merits of the underlying claims when determining whether potential members of the collective action are similarly situated. Id. A more rigorous factual review takes place during the second stage of the certification analysis after discovery, where a court may decertify a conditionally certified collective action and dismiss the claims of the opt-in plaintiffs (without prejudice). Id. at 8.
Judge McMahon specifically cited the fact that courts in the Second Circuit have “routinely” granted conditional certification of a FLSA collective action based on a single plaintiff’s affidavit when the employee declares that other co-workers were subjected to similar employer practices. In applying the principle to this matter, the Court cited to the single affidavit submitted by the named Plaintiff that chronicled his eleven years of employment at the Boathouse during which he claimed the Boathouse failed to provide him and all other tipped front-of-house employees with notice it was taking a tip credit against their wages, including for all worked hours during which they performed non-tipped duties for more than 20% of the time. Id. at 10-11. According to the employee, these common practices resulted in the Boathouse unlawfully compensating him and the other tipped workers below the New York tipped minimum wage and overtime rates. Plaintiff also claimed the Boathouse required him and all tipped front-of-house employees to maintain their work uniforms without proper reimbursement and further deducted a meal credit from their wages for meals that did not meet New York’s minimal meal requirements. Id.
Critically, the employee declared that he had personal knowledge from his own observations and his conversations with named and unnamed co-workers during the course of his eleven years of employment of the Boathouse applying the same policies (and violations) to “all tipped front-of-house employees.” Id. at 11. Judge McMahon found that based on his declaration alone, Plaintiff satisfied his minimal burden of showing he is “similarly situated” to the proposed class members. The Court found that Plaintiff set forth a factual basis for his claims of common policies violating the FLSA, i.e., specifically, policies “depriving tipped front-of-house workers of wages, failing to reimburse workers for uniform maintenance, and deducting improper meal credits.” Id.
The Court found unconvincing the Boathouse’s arguments that the worker did receive proper notice of the restaurant’s tip credit policy, failed to plead sufficient facts to support his allegations, and that his declaration contained false statements. The Court instead noted that at the first stage of conditional certification, it “does not resolve any factual disputes” and stated that case law is “clear” that a single plaintiff’s affidavit may be enough to meet the evidentiary burden. Id. at 11-12. However, the Court did agree with the Boathouse that because two of the job positions Plaintiff sought to include in his collective action (“captains” and “assistants”) did not actually exist at the restaurant while it was owned and operated by Defendants, those positions should not be included in the definition of the collective action. Id. Otherwise, the Court found that the worker met his “low burden” to show that he was similarly-situated with the other proposed class members.
Notably, the Court limited the proposed collective action to any persons employed at the Boathouse from October 6, 2019 through the date the Complaint was filed (October 26, 2022), but not including those currently employed on the date of the Decision and Order (September 25, 2023), unless that person was also employed on October 26, 2022. Id. at 12-13. This was in light of a new concessionaire (and not the defendants sued in the case) reopening the Boathouse restaurant in June 2023 after it was closed between October 16, 2022 through that time.
As a result of its granting conditional certification, the Court authorized notice to be sent out to a collective class consisting of all tipped front-of-house bartenders, bussers, runners, and servers employed at the Boathouse during the aforementioned three-year period. In order to effectuate the notice mailing process, the Court also ordered the Boathouse to provide plaintiff with names and addresses of all collective class members to allow them the opportunity to opt-in to the case. The Judge also denied plaintiff’s request to post the notice at the Boathouse, as it is no operated under entirely new management, but granted plaintiff’s request to equitably toll the statute of limitations from the date plaintiff filed his motion for conditional certification through the date notice is mailed out to the potential opt-in plaintiffs.
Implications for Employers
The order in this case is the latest example of the stark minimal burden employees must meet in order to conditionally certify a FLSA collective action within the Second Circuit. In this case, a single plaintiff’s affidavit – which included alleged discussions with unnamed co-workers confirming they were subjected to common unlawful policies – was enough to convince a judge to conditionally certify a proposed collective class. In order to give themselves a chance at defeating a conditional certification motion similar to the one filed against the Boathouse in this case, employers and businesses in the Second Circuit are well- advised to regularly keep themselves up to speed and aware of the ever-evolving developments in the world of wage& hour law, state and local rules and regulations concerning pay practices, and abide by all necessary paperwork and record-keeping requirements in their respective jurisdictions.