United States District Court, M.D. North Carolina
VANESSA CHAVEZ, AMY BERLAK, BROOKE GRAHAM, and MELISSA VARNER, on behalf of themselves and all others similarly situated, Plaintiffs,
T&B MANAGEMENT, LLC, and T&B CONCEPTS OF HICKORY, LLC, each d/b/a HICKORY TAVERN, Defendants.
MEMORANDUM OPINION AND ORDER
D. SCHROEDER, District Judge.
dispute involves a putative collective action by servers and
bartenders of Defendants (also collectively, “Hickory
Tavern”) who operate various restaurants. Plaintiffs
allege that Defendants have violated the tip-credit
provisions of the Fair Labor Standards Act
(“FLSA” or the “Act”), 29 U.S.C.
§§ 201 et seq., by requiring these
employees to spend more than twenty percent of their workweek
engaged in non-tippable activities. Before the court are
Defendants' motion to dismiss the first amended complaint
(Doc. 28) and motion to strike a number of consents by
Plaintiffs to join the action on the ground they were
solicited before Plaintiffs sought certification of the
collective action under 29 U.S.C. § 216(b) (Doc. 22).
Also, Plaintiffs have moved to conditionally certify the
action as a collective. (Doc. 38.) The court heard argument
on the pending motions on April 17, 2017, and they are ripe
reasons that follow, the court will grant Defendants'
motion to dismiss the amended complaint, but Plaintiffs will
be permitted thirty days within which to file an amended
complaint to raise the dual occupation claim they contend
they wish to pursue.
in the light most favorable to Plaintiffs, the allegations of
the amended complaint show the following:
operate twenty-three casual dining restaurants under the name
“Hickory Tavern” throughout North Carolina, South
Carolina, Alabama, and Tennessee. (Id. at 3, ¶
9.) Plaintiffs are former Hickory Tavern employees who allege
that the restaurant chain engaged in a “systemic scheme
of wage abuses” against its tipped server employees.
(Id. at 2-3, ¶¶ 1-6.) Specifically,
Plaintiffs contend that Hickory Tavern required its tipped
server employees to spend more than twenty percent of their
workweek performing related but non-tip-generating duties and
tasks, which they term “sidework, ” for which they
were paid below minimum wage, in violation of the FLSA.
Plaintiffs bring this action collectively on behalf of
themselves and the class of similarly situated persons,
defined as “[a]ll hourly tipped employees of Hickory
Tavern who work, or worked, as servers [or
bartenders at any of Defendants' Hickory Tavern
restaurants from August 1, 2013 through the present, and who
Defendants did not pay minimum wage when their non-tip
generating work exceeded twenty percent (20%) of their
workweek.” (Id. at 5, ¶¶ 18, 19.)
addition to sidework, the named Plaintiffs and proposed class
members operate in “a team oriented system” known
as “The Loop.” (Id. at 9, ¶ 39.)
The Loop divides an employee's daily routine into five
steps, functioning in a continuous cycle: (1) greeting
patrons, (2) serving them their first round, (3) providing
them with food and drinks, (4) bussing tables, and (5)
preparing silverware and performing general sidework.
(Id. at 10, ¶ 40.) Once a server completes the
fifth step, he or she begins the cycle again with the first
step. (Id. at 9-10, ¶¶ 40-47.) The Loop
specifically instructs tipped employees to spend more than
twenty percent of their time doing work that does not
generate tips for themselves. (Id. at 10, ¶
42.) Defendants also have a policy of not pooling tips among
servers, meaning that a server who assists a fellow employee
does not generate work for himself. (Id. at 6,
tipped employees, Plaintiffs were paid an hourly rate of
$2.13, below the Federal minimum wage of $7.25 per hour.
Defendants supplemented Plaintiffs' hourly rate with a
“tip credit, ” as authorized by the FLSA.
See 29 U.S.C. § 203(m). Plaintiffs do not
allege that they did not earn at least the minimum wage for
their total hours worked, but they claim they spent more than
twenty percent of their workweek completing sidework. (Doc. 6
at 11, ¶ 50.) According to Plaintiffs, when tipped
employees perform sidework for more than twenty percent of
their workweek, the FLSA requires that the employer record
the sidework and page the employees minimum wage for it.
(Id. at 7, ¶ 31.) Plaintiffs contend that
Defendants' failure to properly record all time they
engaged in sidework and to pay them minimum wage for it
violates the FLSA, and Plaintiffs seek the wage difference -
$5.12 per hour - for all sidework (not just that over twenty
percent) performed by them and the collective members.
(Id. at 11-12, ¶¶ 51, 53.)
2016, Defendants modified their compensation practices,
paying servers and bartenders $7.25 per hour to perform
“pre-shift and post-shift duties.” (Id.
at 12, ¶¶ 55-56.)
filed this action against Defendants on August 1, 2016,
alleging one count under the FLSA. (Doc. 1 at 7-8,
¶¶ 34-44; Doc. 6 at 13-15, ¶¶ 64-76.)
They seek unpaid wages, liquidated damages, attorney's
fees, prejudgment interest, and the costs of this action.
(Doc. 6 at 15.)
Standard of Review
purpose of a Rule 12(b)(6) motion is to “test the
sufficiency of a complaint” and not to “resolve
contests surrounding the facts, the merits of a claim, or the
applicability of defenses.” Republican Party of
N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). In
considering a Rule 12(b)(6) motion, a court “must
accept as true all of the factual allegations contained in
the complaint, ” Erickson v. Pardus, 551 U.S.
89, 94 (2007) (per curiam), and all reasonable inferences
must be drawn in the plaintiff's favor, Ibarra v.
United States, 120 F.3d 472, 474 (4th Cir. 1997). To be
facially plausible, a claim must “plead factual
content that allows the court to draw the reasonable
inference that the defendant is liable” and must
demonstrate “more than a sheer possibility that a
defendant has acted unlawfully.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 556 (2007)). While
“the complaint, including all reasonable inferences
therefrom, [is] liberally construed in the plaintiff's
favor, ” this “does not mean that the court can
ignore a clear failure in the pleadings to allege any facts
[that] set forth a claim.” Estate of Williams-Moore
v. All. One Receivables Mgmt., Inc., 335 F.Supp.2d 636,
646 (M.D. N.C. 2004) (citing McNair v. Lend Lease Trucks,
Inc., 95 F.3d 325, 327 (4th Cir. 1996)). Mere legal
conclusions are not accepted as true, and “[t]hreadbare
recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.”
Iqbal, 556 U.S. at 678
The Statute, Regulation, and Interpretive Guidance
allege that the non-tip generating work (sidework and The
Loop tasks) they were required to perform violated the FLSA
because in the aggregate it habitually and regularly exceeded
twenty percent of their workweek. (Doc. 6, ¶¶
47-51.) Plaintiffs rely principally on the U.S. Department of
Labor (“DOL”) regulations, related agency opinion
letters, a handbook, and a “fact sheet.”
Defendants contend that Plaintiffs' asserted twenty
percent rule is not founded on the FLSA but rather is based
on statements found only in agency documents that are not
entitled to deference. (Doc. 29 at 15-18.)
any question of statutory authority, the court begins with
the FLSA's text, which reads in relevant part:
In determining the wage an employer is required to pay a
tipped employee, the amount paid such employee by the
employee's employer shall be an amount equal to -
(1) the cash wage paid such employee which for purposes of
such determination shall be not less than the cash wage
required to be paid such an employee on August 20, 1996; and
(2) an additional amount on account of the tips received by
such employee which amount is equal to the difference between
the wage specified in paragraph (1) and the wage in effect
under section 206(a)(1) of this title.
The additional amount on account of tips may not exceed the
value of the tips actually received by an employee.
29 U.S.C. § 203(m). The FLSA defines “tipped
employee” to mean “any employee engaged in an
occupation in which he customarily and regularly receives
more than $30 a month in tips.” Id. §
interpreting the phrase “more than $30 a month in tips,
” the DOL has issued the following regulation:
(e) Dual jobs. In some situations an employee is employed in
a dual job, as for example, where a maintenance man in a
hotel also serves as a waiter. In such a situation the
employee, if he customarily and regularly receives at least
$30 a month in tips for his work as a waiter, is a tipped
employee only with respect to his employment as a waiter. He
is employed in two occupations, and no tip credit can be
taken for his hours of employment in his occupation of
maintenance man. Such a situation is distinguishable from
that of a waitress who spends part of her time cleaning and
setting tables, toasting bread, making coffee and
occasionally washing dishes or glasses. It is likewise
distinguishable from the counterman who also prepares his own
short orders or who, as part of a ...