UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

VAIL LOPEZ, et al., )
)
Plaintiffs, )
)
v. ) Civil Case No. 14-1040 (RJL-GMH)
)
TIMEco, INC., et al., ) F I L E D
)
Defendants. ) AUG 3 l 2017
C|erk. U.S. D|str|ct & Bankruptcy
MEMORAN UM OPINION Courts for the D|str|ct of Columb|a

 

(August 2 § ,2017)[D1<t.#24]

Plaintiffs are ten individuals employed by Timeco, Inc., as butchers, stockpersons,
meat packers, and deliverymen. Their lawsuit asserts that Timeco and its president,
Houshang Momenian, paid them unlawful Wages in violation of federal and District of
Columbia law. Before the Court is plaintiffs’ Motion for Summary Judgment Regarding
Tip Credit [Dkt. #24]. The Motion attempts to preclude defendants from limiting their
potential liability by counting as Wages tips earned by plaintiffs Upon consideration of
the pleadings, relevant laW, and the entire record herein, the Court determines that plaintiffs
have not met their burden to show that there are no genuine disputes of material fact
regarding the “tip credit” issue. Accordingly, the Court Will DENY plaintiffs’ Motion.

BACKGROUND

Tipping is customary in many industries. The Fair Labor Standards Act (“FLSA”)
permits employers in Such industries to calculate a “tip credit” and to include that amount

When figuring an employee’s total “Wage” for purposes of complying With FLSA’s

minimum wage provisions See 29 U.S.C. § 203(m). The net result is that an employer
can pay an employee less than the federally-mandated minimum wage if the employee
earns enough in tips to make up the difference While this practice is generally thought to
benefit employees because they retain any surplus above the minimum wage, FLSA also
imposes certain safeguards As relevant here, “an employer is not eligible to take the tip
credit unless it has informed its tipped employees in advance of the employer’s use of the
tip credit.” 29 C.F.R. § 531.59(b); see 29 U.S.C. § 203(m)(2).

The instant lawsuit asserts claims under FLSA and two D.C. statutes for defendants’
alleged failure to pay minimum wage or overtime.] Anticipating that defendants will rely
on the tip credit to reduce their potential liability, plaintiffs filed the instant Motion. They
assert four facts in support of the Motion, none of which defendants dispute: (l) plaintiffs
worked for defendants, Pls.’ SOF 11 l;2 (2) plaintiffs were paid fixed weekly rates, Pls.’
SOF 11 2; (3) plaintiffs received tips, Pls.’ SOF 11 3 ; and (4) Houshang Momenian, President
of Timeco, “did not discuss tips with the [p]laintiffs and did not disclose that [d]efendants
intended to use the tips as a credit toward minimum wage,” Pls’ SOF 11 4.

Although defendants do not contest these four facts, they proffer evidence which
casts them in a different light. Specifically, defendants present an affidavit by Mart
Dashzegve, the store manager for Timeco, in which Dashzegve states that he “supervised

all of the plaintiffs.” Decl. of Mart Dashzegve 1111 l-4 (“Dashzegve Decl.”) [Dkt. #32-31;

 

1 The two statutes are the D.C. l\/linimuin Wage Revision Act, D.C. Code §§ 32-l()Ol el seq., and the
D.C. Wage l’ayment and Collection Law, D.C. Code §§ 32-1301 et seq.

2 'l`lie panies do dispute whether some or all ofthe plaintiffs were independent contractors as opposed
to employees See Am. Compl. 11 l6; Aiiswer to Am. Compl. 11 16. l do not resolve that dispute here.

2

cf. Am. Compl. 11 ll (alleging “Momenian supervised [p]laintiffs directly or indirectly”)
[Dkt. #91. Dashzegve explains that it was his role, as store manager, to “explain[] the job
to new workers.” Dashzegve Decl. 11 5. He also says that he discussed tips with each new
worker, id. 1111 7-10, and further that “[a]ll of the [p]laintiffs understood that their income
was Supplemented by tips,” id. 11 9. Plaintiffs did not file a reply in support of their l\/lotion
and thus have not addressed the Dashzegve declaration.

STANDARD OF REVIEW

Plaintiffs move for summary judgment Summary judgment is appropriate “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). “A fact is material if it
‘might affect the outcome of the suit under the governing law,’ and a dispute about a
material fact is genuine ‘if the evidence is such that a reasonable jury could return a verdict
for the nonmoving party.”’ Steele v. Schafer, 535 F.3d 689, 692 (D.C. Cir. 2008) (quoting
Ana'erson v. Li`berly Lobby, Inc., 477 U.S. 242, 248 (1986)). “ln making that determination,
the court ‘must view the evidence in the light most favorable to [the nonmoving party],
draw all reasonable inferences in [their] favor, and eschew making credibility
determinations or weighing the evidence.”’ Calhouri v. Johnson, 632 F.3d l259, l26l
(D.C. Cir. 201 l) (quoting Lathram v. Snow, 336 F.3d 1085, 1088 (D.C. Cir. 2003)).

ANALYSIS

To prevail on their Motion for summary judgment, plaintiffs must establish that
Timeco failed to inform them that it would use a tip credit to offset the wages paid by the

company. See 29 U.S.C. § 203(m); 29 C.F.R. § 531.59(b). The only evidence proffered

3

by plaintiffs in support of this conclusion is deposition testimony that defendant Momenian
did not personally discuss the tip credit with plaintiffs Pls.’ SOF 11 l.

Plaintiffs’ proffer is insufficient to carry their burden. Even without the Dashzegve
declaration, a reasonable jury could infer that an organization with the resources to hire ten
workers is likely also to employ supervisors who, as part of their function, discuss company
policy with their subordinates That is especially so where, as here, plaintiffs have
acknowledged that Momenian, as president of the company, may have only “indirectly”
supervised Timeco’s employees Am. Compl. 11 ll.

But I need not rely only on a negative inference drawn from plaintiffs’ sparse
proffer. The Dashzegve declaration states that Dashzegve discussed with every worker
Timeco’s use of tips to supplement regular wages, and that each of the workers who are
now plaintiffs in this case understood that policy. Although the declaration does not make
clear whether the content of these discussions complied with all of the requirements set
forth in the federal regulations, viewed in the light most favorable to defendants, the
declaration is sufficient at least to raise a genuine dispute as to whether Timeco properly
disclosed to plaintiffs that it would use a tip credit. Accordingly, plaintiffs’ Motion for
summary judgment on this issue must be denied.

CONCLUSION
For all of the above reasons, the Court will DENY plaintiffs’ Motion for Summary

Judgment Regarding Tip Credit. An Order accompanies this Memorandum Opinion.

 
 

 

RiCHARD J. L oN
United States District Judge

