On March 27, 2015, in the case of Flood v. Carlson Restaurants Inc., Judge Analisa Torres of the United States District Court for the Southern District of New York denied Defendants motion to transfer the action to the Northern District of Texas and to partially dismiss Plaintiffs’ FLSA minimum wage claim. Plaintiffs originally commenced this action on April 17, 2014, on behalf of themselves and all similarly situated current and former tipped workers – including servers, bussers, runners, bartenders, barbacks, and hosts – employed at T.G.I. Friday’s restaurants nationwide. The complaint alleged that Defendants failed to pay their employees at an overtime rate of time and one half for all over worked over 40 per workweek and also unlawfully paid employees less than the full statutory minimum wage while failing to properly avail themselves of the federal “tip credit.”
In regards to Defendants’ motion to transfer, the court was required to engage in a two-step inquiry. First they had to assess whether the action could have originally been brought in the transferee court. Second, they had to evaluate several factors relating to the convenience of transfer and interest of justice. Specifically, these factors include: (1) the plaintiff’s choice of forum, (2) the convenience of witnesses, (3) the location of relevant documents and relative ease of access to sources of proof, (4) the convenience of parties, (5) the locus of operative facts, (6) the availability of process to compel the attendance of unwilling witnesses, and (7) the relative means of the parties. The court will also consider the “forum’s familiarity with the governing law” and “trial efficiency and the interests of justice, based on the totality of circumstances.” The court first determined that the Plaintiffs’ choice of forum created no inference of forum shopping since his claim arose from his employment in that District. Further, the majority of the named Plaintiffs reside in the very same District. While Defendants contested that Plaintiffs’ choice of forum should not be afforded deference because their claims were asserted on an aggregate basis, the Court instead found that the opt-in structure of FLSA collective actions strongly suggested that Congress intended to give Plaintiffs control over the bringing of a collective action. Accordingly, the Court held that Plaintiffs’ choice of forum was entitled to deference. The court found that the convenience of the witnesses was a neutral factor in this case since even though witnesses to Defendants’ corporate policies weighs in favor of transfer, Defendants had failed to offer evidence demonstrating that witness’s familiar with these practices would actually be inconvenienced if the action remained in the Southern District of New York. Further, testimony about the on-site application of Defendants’ policies and of employees’ duties favored a New York venue.
The court found that the location of relevant documents and ease of access to sources of proof was a neutral factor, due to the ability to easily mail or fax documents. The convenience of the parties was similarly neutral, because a venue transfer would merely serve to shift the inconvenience to the other party. The locus of operative facts in employment cases is typically found at the locations where employees worked. Considering the fact that several Plaintiffs worked in a location within the Southern District of New York, and there were several New York Labor Law claims, the court concluded that this factor did not weigh in favor of transfer. The court next looked at the availability of process and found that it did not favor transfer. Defendants contended that their “crucial witnesses” resided in the Northern District of Texas and could not be subpoenaed for trial in the Southern District of New York, yet the court found that Defendants could force current employees to testify without subpoena, and their former employees were not entitled to the same deference shown to non-party witnesses since they are already more likely to willingly attend than other non-party witnesses. Further, Defendants failed to produce evidence showing that its witnesses would be unwilling to testify. In regards to the relative means of the parties, the court found that this factor slightly weighed against transfer since, even though Defendants have far greater financial resources than Plaintiffs, Plaintiffs did not adduce evidence showing that the costs associated with pursuing this action would significantly increase if transfer was granted. In regards to familiarity with governing law, the court sided with Plaintiff in finding that the Southern District of New York was more familiar with applying New York Labor Law than the Northern District of Texas. In light of all the previously addressed factors, the court held accordingly that transfer would neither promote trial efficiency nor serve the interests of justice.
The court next addressed Defendants motion to dismiss Plaintiffs’ minimum wage claim on the grounds that Plaintiffs cannot, as a matter of law, state a FLSA minimum wage claim based on an alleged violation of the twenty percent side work rule. To elaborate, this rule provides that Tipped Workers who spend more than 20% of their time performing side work must be paid at the full minimum wage for that time. The court looked at previous decisions in other circuits who have ruled on this issue, such as the Eighth Circuit, and the fact that the Southern District of New York has consistently endorsed this rule, in rejecting Defendants’ argument. Defendants additionally argued that Plaintiffs failed to state a claim because they did not identify the exact percentage of time Plaintiffs spent doing side work, how often they performed these duties, during what time periods they performed these duties, and which particular duties they had to perform. However, the court held that Plaintiffs did not need to provide the degree of specificity that Defendants demanded. Plaintiffs provided enough information when they asserted what general tasks employees had to perform, how many hours they spent each shift performing these tasks, and at what point in the shift they performed them. Accordingly, Defendants’ motion to partially dismiss Plaintiffs’ FLSA minimum wage claim was dismissed by the Court.
The NYC employment lawyers at Fitapelli & Schaffer are looking to represent all servers, bussers, runners, bartenders, barbacks, hosts, and other current and former tipped workers who are or have been employed by T.G.I. Friday’s restaurants nationwide. Please contact us at (212) 300-0375 to schedule a free consultation to further discuss if you are qualified to opt-in. For more information, please visit our website at www.fslawfirm.com.