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Calabrese v. TGI Friday's Inc.

United States District Court, E.D. Pennsylvania

November 2, 2017

ADAM CALABRESE, Individually and on behalf of all others similarly situated Plaintiff,
v.
TGI FRIDAY'S INC., et al., Defendants

          MEMORANDUM AND ORDER

          JOYNER, JUDGE

         This putative collective/class action has been brought before the Court on Motion of the Defendants for entry of summary judgment in their favor on all of Plaintiff's claims under the Fair Labor Standards Act, 29 U.S.C. §201, et. seq., the Pennsylvania Minimum Wage Act, 43 P.S. §333.102, et. seq., and the New Hampshire Minimum Wage Law, N.H. Rev. Stat. §279:1, et. seq. For the reasons which follow, the motion shall be granted.

         Factual Background

         In September 2013, Plaintiff Adam Calabrese was hired for a server position at the TGI Friday's restaurant in Concord, New Hampshire, a position in which he remained through April 2014, when he began working at the TGI Friday's in Montgomeryville, Pennsylvania. Plaintiff worked as a server at the Montgomeryville Friday's through September 2014. In October 2014, Mr. Calabrese resumed working at the Friday's in Concord, New Hampshire where he remained until February, 2015. (Pl's Compl., ¶ 19). In both of the TGI Friday's restaurants in which Plaintiff worked, he was paid on an hourly basis, with Friday's paying him a cash wage of $2.83 per hour in Pennsylvania and $3.26 hourly in New Hampshire plus tips. (Pl's Compl., ¶s 38, 39, 43). In the event that Plaintiff did not earn enough in tips to bring his hourly wage up to the minimum wage, Friday's was to make up the difference. Plaintiff avers that he typically worked some 30 hours per week at both the Concord, NH and Montgomeryville, PA locations, usually in 5 shifts lasting approximately 6 hours and beginning around 4 p.m. and ending at 10 p.m. (Pl's Compl., ¶s 41-42).

         Although Friday's took a “tip credit” in paying Plaintiff his compensation which amounted to $3.99 in New Hampshire and $4.42 in Pennsylvania, Plaintiff contends that it failed to inform him of its intention to take that credit and the amount it intended to claim as a credit in violation of U.S. Department of Labor regulations and relevant provisions of the FLSA and Pennsylvania and New Hampshire state law. (Pl's Compl., ¶s 50-51, 54-55, 57). In addition, Plaintiff alleges that Friday's violated the New Hampshire Minimum Wage Law insofar as it mandated that he participate in a tip pooling/tip sharing arrangement while he was working at the Concord location. (Pl's Compl., ¶s 59-61).

         In the motion which is now before us, Defendant TGI Friday's submits that because the evidence in this matter demonstrates that it did in fact provide Plaintiff with proper notice of the tip credit provisions of the FLSA and the applicable states' law, and that, contrary to Plaintiff's claims, it did not require him to share his tips with other employees in New Hampshire, it is entitled to the entry of judgment in its favor as a matter of law on all of the claims against it.

         Summary Judgment Standards

         In ruling upon a motion for summary judgment, the courts are generally guided by the language contained in Fed.R.Civ.P. 56(a):

A party may move for summary judgment, identifying each claim or defense - or the part of each claim or defense - on which summary judgment is sought. The 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. The court should state on the record the reasons for granting or denying the motion.

         In reading this rule, it is clear that summary judgment is appropriately entered only when the movant shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Willis v. UPMC Children's Hospital of Pittsburgh, 808 F.3d 638, 643 (3d Cir. 2015). An issue of fact is material and genuine if it “affects the outcome of the suit under the governing law and could lead a reasonable jury to return a verdict in favor of the nonmoving party.” Parkell v. Danberg, 833 F.3d 313, 323 (3d Cir. 2016)(quoting Willis, supra. and Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).

         In considering a motion for summary judgment, the reviewing court should view the facts in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Burton v. Teleflex, Inc., 707 F.3d 417, 425 (3d Cir. 2013). “If the non-moving party bears the burden of persuasion at trial, ‘the moving party may meet its burden on summary judgment by showing that the nonmoving party's evidence is insufficient to carry that burden.'” Kaucher v. County of Bucks, 455 F.3d 418, 423 (3d Cir. 2006)(quoting Wetzel v. Tucker, 139 F.3d 380, 383, n.2 (3d Cir. 1998)). In response, and “to prevail on a motion for summary judgment, ‘the non-moving party must present more than a mere scintilla of evidence; there must be evidence on which the jury could reasonably find for the non-movant.'” Burton, supra, (quoting Jakimas v. Hoffmann-La Roche, Inc., 485 F.3d 770, 777 (3d Cir. 2007)). Thus, “[t]he moving party is entitled to judgment as a matter of law when the non-moving party fails to make “a sufficient showing on an essential element of her case with respect to which she has the burden of proof.” Moody v. Atlantic City Board of Education, 870 F.3d 206, 213 (3d Cir. 2017)(quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).[1]

         Discussion

         As noted, this case essentially presents two claims - (1) that Defendant violated federal and applicable state labor and wage laws by failing to inform him that it would be taking a “tip credit” in paying him his wages; and (2) that it violated New Hampshire law by requiring him to participate in a tip pool. In pressing these claims, Plaintiff is first and foremost invoking the federal Fair Labor Standards Act, 29 U.S.C. §201, et. seq., which was enacted by Congress in 1938 with the goal of “protecting all covered workers from substandard wages and oppressive working hours.” Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 147, 132 S.Ct. 2156, 2162, 183 L.Ed.2d 153 (2012)(quoting Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 739, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981)).

         Under Section 6 of the FLSA 29 U.S.C. §206,

(a) Every employer shall pay to each of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, wages at the following rates:
(1) except as otherwise provided in this section, not less than -
...
$7.25 an hour ...

29 U.S.C. §206(a)(1). This rate is the same under both Pennsylvania and New Hampshire state law. See, 43 P.S. §333.104(8)(a.1); N.H. Rev.Stat. 279:21.

         However, “Congress carved out an exception to the minimum wage for certain occupations in which tips can reliably be expected to supplement wages.” Perez v. Lorraine Enterprises, Inc., 769 F.3d 23, 25 (1st. Cir. 2014). This so-called “tip credit” is described in 29 U.S.C. §203(m):

... 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 the date of the enactment of this paragraph [enacted 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 6(a)(1) [29 U.S.C. §206(a)(1)].
The additional amount on account of tips may not exceed the value of the tips actually received by an employee. The preceding 2 sentences shall not apply with respect to any tipped employee unless such employee has been informed by the employer of the provisions of this subsection, and all tips received by such employee have been retained by the employee, except that this subsection shall not be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips.

         The Code of Federal Regulations, 29 C.F.R. §531.59, similarly addresses the tip credit issue.[2] It states:

(a) In determining compliance with the wage payment requirements of the Act, under the provisions of section 3(m) the amount paid to a tipped employee by an employer is increased on account of tips by an amount equal to the formula set forth in the statute (minimum wage required by section 6(a)(1) of the Act minus $2.13), provided that the employer satisfies all the requirements of section 3(m). This tip credit is in addition to ...

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