Allison et al v. Dolich et al

Motion for Summary Judgment . Oral Argument requested.

D. Or.June 12, 2017

Plaintiffs’ Motion for Summary Judgment Page 1 Jon M. Egan, OSB 002467 Jegan@eganlegalteam.com Jon M. Egan, PC 547 Fifth Street Lake Oswego, OR 97034-3009 Telephone: (503) 697-3427 Fax: (866) 311-5629 Attorney for Plaintiffs UNITED STATES DISTRICT COURT DISTRICT OF OREGON NANCY ALLISON and HOLLY BURNEY, both in their individual capacities and, in addition, as a collective action on behalf of others similarly situated, Plaintiffs, vs. SCOTT DOLICH and ANNA JOSEPHSON, individuals, and PARK KITCHEN LLC and THE BENT BRICK, LLC, Oregon limited liability companies, Defendants. Case No. 3:14-cv-01005-AC Plaintiffs’ Motion for Summary Judgment Oral argument requested TABLE OF CONTENTS I. Legal Standard ............................................................................................................... 3 A. Individual plaintiffs’ retaliation claims ..................................................................... 4 B. Collective action tip theft claim (damages) ............................................................... 6 C. Defendants’ affirmative defenses .............................................................................. 7 II. Argument ....................................................................................................................... 8 A. Holly Burney’s retaliation claim ................................................................................ 8 B. Nancy Allison’s retaliation claim .............................................................................. 17 C. Collective action tip theft claim (damages) ............................................................. 23 D. Defendants’ affirmative defenses ............................................................................ 26 Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 1 of 31 Plaintiffs’ Motion for Summary Judgment Page 2 TABLE OF AUTHORITIES Cases Alvarez v. IBP, Inc., 339 F.3d 894 (9th Cir.2003), aff'd, 546 U.S. 21 (2005) .................... 29, 30 Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946) ..................................................... 6 Bias v. Moynihan, 508 F.3d 1212 (9th Cir.2007) ........................................................................ 3 E.E.O.C. v. Romeo Cmty. Sch., 976 F.2d 985 (6th Cir.1992) ...................................................... 5 Fed. Trade Comm’n v. Stefanchik, 559 F.3d 924 (9th Cir.2009) ............................................... 3 Flores v. City of San Gabriel, 824 F.3d 890 (9th Cir.2016), cert. denied sub nom. City of San Gabriel, Cal. v. Flores, No. 16-911, 2017 WL 274839 (U.S. May 15, 2017) ........................... 30 Haro v. City of Los Angeles, 745 F.3d 1249 (9th Cir.2014) ...................................................... 30 Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132 (2d Cir.1999) .................................................. 29 In re Farmers Ins. Exch. Claims Representatives’ Overtime Pay Litig., 336 F.Supp.2d 1077 (D.Or. 2004), aff’d in pertinent part 481 F.3d 1119 (9th Cir.2007) ....................................... 27 Kasten v. Saint-Gobain Performance Plastics Corp., 563 U.S. 1, 131 S.Ct. 1325, 179 L.Ed. 2d 379 (2011) ................................................................................................................................. 4 Lambert v. Ackerley, 180 F.3d 997 (9th Cir.1999) ...................................................................... 4 Love v. RE/MAX of Am., Inc., 738 F.2d 383 (10th Cir.1984) ..................................................... 5 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) .................................. 4 McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973) ........ 6 Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288, 80 S.Ct. 332, 4 L.Ed.2d 323 (1960) 4 Onken v. W.L. May Co., 300 F.Supp.2d 1066 (D. Or. 2004) ..................................................... 6 Saffels v. Rice, 40 F.3d 1546 (8th Cir.1994) ................................................................................ 5 Sapperstein v. Hager, 188 F.3d 852 (7th Cir.1999) .................................................................... 5 Singh v. Jutla & C.D. & R’s Oil, Inc., 214 F.Supp.2d 1056 (N.D.Cal. 2002) ................... 6, 16, 22 Suever v. Connell, 579 F.3d 1047 (9th Cir.2009) ........................................................................ 3 Tenn. Coal, Iron & R. Co. v. Muscoda Local No. 123, 321 U.S. 590, 64 S.Ct. 698, 88 L.Ed. 949 (1944) ........................................................................................................................................ 5 Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016) ..........................................................7 Statutes 29 U.S.C. § 202(a) ....................................................................................................................... 4 29 U.S.C. § 206 .............................................................................................................................7 29 U.S.C. § 215(a)(3) ................................................................................................................... 4 29 U.S.C. § 216(b) ............................................................................................................. 7, 16, 22 29 U.S.C. § 255(a) ...................................................................................................................... 29 29 U.S.C. § 259 .......................................................................................................................... 27 29 U.S.C. § 260 .......................................................................................................................... 27 Rules Fed.R.Civ.P. 56(a) ....................................................................................................................... 3 Regulations 29 C.F.R. § 531.52 ........................................................................................................................ 6 29 C.F.R. § 531.54 ........................................................................................................................ 6 29 C.F.R. § 531.60 ..................................................................................................................... 23 Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 2 of 31 Plaintiffs’ Motion for Summary Judgment Page 3 MOTION Plaintiffs’ counsel hereby certifies that he has conferred with defense counsel via telephone and email regarding the subject matter of this motion, and that defendants oppose the motion. This Court has already granted plaintiffs summary judgment on liability for their tip theft claims [Dkt. 129]. All that remains is the arithmetic to set damages for the collective members. Plaintiffs hereby move for summary judgment on those damages. Plaintiffs also move for summary judgment on the named plaintiffs’ individual retaliation claims. Finally, plaintiffs move for summary judgment on defendants’ affirmative defenses. This motion is supported by the Declarations of Jon M. Egan, Michèle Lauzier, Holly Burney, and Nancy Allison submitted herewith. MEMORANDUM I. Legal Standard Summary judgment is appropriate if there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The moving party bears the initial responsibility of informing the court of the basis of its motion, and identifying the absence of a genuine issue of material fact. Fed. Trade Comm’n v. Stefanchik, 559 F.3d 924, 927-28 (9th Cir.2009). Once the moving party meets its initial burden of demonstrating the absence of a genuine issue of material fact, the burden then shifts to the nonmoving party to present “specific facts” showing a “genuine issue for trial.” Id. The nonmoving party must go beyond the pleadings and designate facts showing an issue for trial. Bias v. Moynihan, 508 F.3d 1212, 1218 (9th Cir.2007). The substantive law governing a claim determines whether a fact is material. Suever v. Connell, 579 F.3d 1047, 1056 (9th Cir.2009). If the factual context makes the nonmoving Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 3 of 31 Plaintiffs’ Motion for Summary Judgment Page 4 party’s claim as to the existence of a material issue of fact implausible, that party must come forward with more persuasive evidence to support his claim than would otherwise be necessary. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). A. Individual plaintiffs’ retaliation claims Section 215(a)(3) of the FLSA protects any complaint about an employer’s action that is suspected in good faith of being illegal “under” or “related to” the FLSA. The FLSA sets forth minimum wage and overtime standards to remedy “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers.” 29 U.S.C. § 202(a). In accordance with our Constitutional system of government, the FLSA is not enforced by “continuing detailed federal supervision or inspection of payrolls,” but rather by setting up each employee as their own private Attorney General, charged with reporting and prosecuting violations through the court system. Kasten v. Saint-Gobain Performance Plastics Corp., 563 U.S. 1, 11-12, 131 S.Ct. 1325, 179 L.Ed. 2d 379 (2011), quoting Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288, 292, 80 S.Ct. 332, 4 L.Ed.2d 323 (1960). Because Congress relies upon individual employees to enforce the FLSA and so many other important rights, it has provided an antiretaliation provision to protect them for making good-faith reports of suspected violations. Section 215(a)(3) provides that it is unlawful “to discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter.” This and similar antiretaliation provisions are necessary for the enforcement scheme to work; otherwise, “fear of economic retaliation” would induce workers “quietly to accept substandard conditions.” Kasten, supra, 563 U.S. at 12. For the same reason, the retaliation provision must “not be interpreted or applied in a narrow, grudging manner.” Lambert v. Ackerley, 180 F.3d 997, 1003 (9th Cir.1999), citing Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 4 of 31 Plaintiffs’ Motion for Summary Judgment Page 5 Tenn. Coal, Iron & R. Co. v. Muscoda Local No. 123, 321 U.S. 590, 597, 64 S.Ct. 698, 88 L.Ed. 949 (1944). For example, “Congress might have put the risk on the employee to do his or her homework and make sure that there was actually a violation before going to the authorities, but it instead protected the employee regardless.” Sapperstein v. Hager, 188 F.3d 852, 857 (7th Cir.1999)(reversing the district court’s dismissal of plaintiff’s retaliation complaint, which had been granted on the grounds that the underlying conduct did not violate the FLSA). The policy rationale is evident. As the Seventh Circuit put it in the oft-quoted Sapperstein opinion, “Determining whether there is an actual violation can mislead even an experienced district court, and a sensible employee who knew [that] he had to be right [in order] to enjoy whistleblower protection would think twice about reporting conduct which might turn out to be lawful.” Id. “To enjoy those protections the conduct at issue must be ‘under’ or ‘related to’ those laws. There is no requirement that those laws must actually be violated. It is sufficient that the plaintiff had a good-faith belief that they might be violated. No further requirements are implied by the law.” Id. See also, e.g., E.E.O.C. v. Romeo Cmty. Sch., 976 F.2d 985, 989- 90 (6th Cir.1992)(finding that plaintiff’s complaint to her employer that she believed they were “breaking some sort of law” sufficed to make out a claim for FLSA retaliation, and that the district court’s dismissal of that claim was “clearly erroneous”); Saffels v. Rice, 40 F.3d 1546, 1549-50 (8th Cir.1994)(same); Love v. RE/MAX of Am., Inc., 738 F.2d 383, 387 (10th Cir.1984)(“The section protects conduct based on a good faith, although unproven, belief that the employer’s conduct is illegal.”). “To fall within the scope of the antiretaliation provision, a complaint must be sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights protected by the statute and a call for their protection. This standard can be met, however, by oral complaints, as well as by written ones.” Kasten, supra, 563 U.S. at 14. The FLSA’s anti-retaliation provisions protect Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 5 of 31 Plaintiffs’ Motion for Summary Judgment Page 6 employees who assert either their own wage rights or those of their fellow employees. Onken v. W.L. May Co., 300 F.Supp.2d 1066, 1068 (D. Or. 2004). “The elements of a retaliation claim under § 15(a)(3) of the FLSA’s anti-retaliation provision are: (1) the plaintiff must have engaged in statutorily protected conduct under § 15(a)(3) of the FLSA, or the employer must have erroneously believed that the plaintiff engaged in such conduct; (2) the plaintiff must have suffered some adverse employment action; and (3) a causal link must exist between the plaintiff’s conduct and the employment action.” Singh v. Jutla & C.D. & R’s Oil, Inc., 214 F.Supp.2d 1056, 1059 (N.D.Cal. 2002). Under the burden-shifting framework, after the plaintiff makes a prima facie case of retaliation, the burden shifts to the defendant to provide a legitimate nondiscriminatory reason for the adverse employment action. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-04, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). If the defendant provides such a reason, the burden shifts back to the plaintiff to show that the proffered reason is a mere pretext. Id. B. Collective action tip theft claim (damages) Each employee is entitled to receive the full federal minimum wage ($7.25 for the duration of the statute of limitations in this case) plus all of their tips. 29 C.F.R. §§ 531.52, 531.54. In order to figure out the collective members’ damages, therefore, we calculate how much they should have received ($7.25 plus their tips received) and compare it with how much they did receive (a higher wage, but less than all tips received). Defendants did not track the amount of tips that each employee received from customers (i.e. before pooling). We must therefore estimate that amount by just and reasonable inference. Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946). In any reverse-engineering attempt, certain assumptions must be made. In our case, we know the total amount of tips taken in for a pay period, and we know how many hours each tip-eligible employee worked. If we assume that each tip-eligible employee earns the same Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 6 of 31 Plaintiffs’ Motion for Summary Judgment Page 7 amount of tips per hour, then we can divide the total tips by the number of hours worked to estimate each collective member’s tips received for purposes of the minimum-wage calculation. Compare, Tyson Foods, Inc. v. Bouaphakeo, 136 S.Ct. 1036, 1047 (2016)(allowing use of statistical averaging in determining individual liability and damages in an FLSA collective action). If the tip deficit (i.e., customer tips minus tips received from the tip pool) is greater than the wage surplus (i.e., nominal wage received minus federal minimum wage), the difference is the amount of the federal minimum wage violation. 29 U.S.C. § 206. An equal amount is due as liquidated damages. 29 U.S.C. § 216(b). C. Defendants’ affirmative defenses Defendants bear the burdens of production and persuasion on their affirmative defenses, and they have thus far not identified any legal or factual bases for any of them. The defenses in Dkt. 114 are as follows: FIRST AFFIRMATIVE DEFENSE (Failure to State a Claim) 12. Plaintiffs fail to state a claim upon which relief can be granted. SECOND AFFIRMATIVE DEFENSE (Good Faith, Legitimate Business Purpose) 13. All employment decisions made regarding plaintiffs were made in good faith and for legitimate, non-discriminatory business reasons. THIRD AFFIRMATIVE DEFENSE (Statute of Limitations) 14. All or part of plaintiffs’ claims are barred by the applicable statutes of limitations to the extent their claims are premised on events occurring outside the statutory limitations period. FOURTH AFFIRMATIVE DEFENSE (Failure to Mitigate) 15. Plaintiffs have failed to mitigate their alleged damages. Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 7 of 31 Plaintiffs’ Motion for Summary Judgment Page 8 FIFTH AFFIRMATIVE DEFENSE (Non-Willful) 16. Any violation of the law by Defendants was non-willful. SIXTH AFFIRMATIVE DEFENSE (Set Off/Prior Settlement) 17. A portion of the monetary relief plaintiffs seek has already been paid to them through as [sic] a settlement in a related matter before the National Labor Relations Board (“NLRB”) and cannot be recovered again through this action. See Dkt. 114. Because defendants have not identified any factual or legal basis for any of these defenses, plaintiffs are entitled to summary judgment. II. Argument The pertinent facts regarding Holly Burney’s 1 termination, Nancy Allison’s termination, the tip theft damages for the collective members, and defendants’ affirmative defenses are as follows. A. Holly Burney’s retaliation claim When asked in an interrogatory why Ms. Burney was terminated, defendants responded that “22. … Ms. Burney refused to comply with Park Kitchen’s tip-pooling policy, which led to defendants’ decision to terminate her employment.” Exhibit 1 to the Declaration of Jon M. Egan (“Egan Dec.”). Scott Dolich likewise testified as to the reason for Ms. Burney’s termination: 2 Q. And why was Holly Burney terminated? 3 A. Holly Burney was discharged because she 4 would not sign what we believed to be a lawful, tip 5 pool policy. Deposition of Scott Dolich, Exhibit 2 to Egan Dec., at 14. Mr. Dolich described Ms. Burney 1 Holly Burney has since married and is now named Holly Rice. However, we will refer to her as Holly Burney to avoid confusion, since she was named Holly Burney at the time of her work at Park Kitchen, as well as when this lawsuit was filed. Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 8 of 31 Plaintiffs’ Motion for Summary Judgment Page 9 complaining about the tip pool policy: p. 41: 13 Q. Did anybody ever express any disagreement 14 with the tip pool policies? 15 A. The biggest one, the biggest incidents of 16 that, were Nan and Holly. 17 Q. Tell me about that. … p. 42: … 9 With Holly, Holly voiced her concern about 10 our new tip pool policy early in 2014. She was — 11 if I remember correctly — concerned about the fact 12 that there was more work involved in our new 13 procedures. And she was also concerned about the 14 legality of it, of our tip pool policy, at which 15 point in time I rechecked with our legal counsel at 16 the time, Tony Motschenbacher, and he confirmed that 17 it was legal. He did inform me that there were 18 legal cases currently under consideration that were 19 challenging the tip pool, the Woody Woo case in 20 particular, but that as it stood in early 2014, that 21 our current tip policy was legal, and that as long 22 as we — it was an entire company policy, the staff 23 was aware of it, and that it was transparent, that 24 it was a legal policy. 25 So I talked to Holly about it and said, We p. 43: 1 believe that our policy is legal. We vetted it out. 2 I would never engage in a policy that I knew was 3 illegal. I would not subject our staff to that. … 13 [A.] Holly was upfront. She said she didn’t 14 agree with it. It was a few days after that, maybe 15 a week after that, where we told her that we 16 couldn’t have — she wouldn’t sign the policy. I 17 believe it was Nate Smith and Anna Josephson who 18 were in the meeting, and they said, with my 19 approval, that we couldn’t have her work at Park 20 Kitchen and not sign the policy. She didn’t have to 21 agree to it, but we thought it was unfair and that — 22 it was unfair for her to be able to work outside 23 of a policy that we believed was legal, lawful, and 24 fair. We couldn’t make an exception for just her. 99: 18 A. My understanding of that was after my 19 meeting with Holly and prior to her termination, she 20 indicated that she wanted to continue to work and Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 9 of 31 Plaintiffs’ Motion for Summary Judgment Page 10 21 that she liked working at Park Kitchen, but she felt 22 like the tip pool policy was illegal. We left that 23 — Holly and I left that conversation on what I felt 24 were good terms. And Anna had contacted me after 25 Holly’s termination had happened and said, We have a 100: 1 situation. This is what happened with Holly. We 2 asked her to sign the tip pool policy before she was 3 going to work on the floor that night and she said 4 that she wasn’t going to sign the policy. And Anna 5 and Nate made the decision to not allow her to work 6 without signing the policy. 7 Anna had discussed that with me 8 beforehand. And I told her that I didn’t think it 9 was fair to allow one person to make an — to make 10 an exception for one person to not sign it and still 11 work. 12 Q. Had she specifically discussed Holly 13 Burney with you ahead of time or just a general rule 14 about what if someone doesn’t sign it? 15 A. Both. 16 Q. Okay. [A.] We discussed in depth, since Holly 17 had brought that up, the fact that she believed it 18 was illegal. That’s when I rechecked with Mr. 19 Motschenbacher whether this was, in fact, the case. 20 Tony informed us that, yes, there are cases that are 21 currently in litigation or in process that challenge 22 it, but currently — or I should say at the time, he 23 believed that our policy was legal and fair. So 24 that’s how we based that upon. We applied that to 25 everybody. It wasn’t just Holly. 101: … 3 [Q.] Did or did not 4 Anna Josephson speak to you specifically about Holly 5 Burney not signing it before Holly’s termination? 6 A. She did. I guess maybe to clarify your 7 question, after my conversation with Holly, I sat 8 down and spoke to Anna and Nate, because they, too, 9 were aware that I was going to be talking to Holly. 10 I told Anna and Nate if Holly or anybody else 11 refuses to sign the document — I believed that it 12 is legal, I believed that it is fair, and if they’re 13 not going to sign it, I cannot make exceptions for 14 them to work over anybody else. Anna Josephson similarly testified about the reason for Ms. Burney’s termination: p. 50: 24 Q. All right. And why was she terminated? Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 10 of 31 Plaintiffs’ Motion for Summary Judgment Page 11 25 A. Holly was terminated because we were — it p. 51: 1 was recommended to us by our attorney that with the 2 change in the tip pool, people need to sign that 3 they understood the tip pool, and that they would 4 agree to work under the tip pool. And Holly 5 wouldn’t sign the document. … 58: 22 Q. Okay. And did everyone sign the change in 23 the tip pool? 24 A. At the meeting? 25 Q. At all. 59: 1 A. There was one person who did not. 2 Q. Okay. And only one, right? 3 A. Correct. 4 Q. And am I to understand that that person 5 was Holly Burney? 6 A. That’s correct. 7 Q. All right. And when was the first time 8 that anyone addressed Ms. Burney about her lack of 9 signature on the form? 10 A. I don’t — I believe we asked her a few 11 times, casually, for the paperwork back before she 12 was terminated. 13 Q. Okay. 14 A. Before the day she was terminated. 15 Q. Right. And what was her response? 16 A. I believe she said she had talked to her 17 lawyer and the tip pool was not legal. 18 Q. And did she say whether she would or 19 wouldn’t sign it or — 20 A. And she would not sign it. … 60: … 23 A. So I said, Nate, will you go ask Holly 24 Burney if she has her paperwork with her. And she 25 did not have it with her so I printed her another 61: 1 copy, and she refused to sign it. She said I — 2 this tip pool is not legal. I will work here. I’m 3 happy to work under the tip pool, but I will not 4 sign it. … 76: … 13 Q. Okay. And how about for Ms. Burney [was she ever disciplined prior to termination]? Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 11 of 31 Plaintiffs’ Motion for Summary Judgment Page 12 14 A. No. … 122: 19 [Q.] So we talked before about you 20 writing up a notice of termination while Ms. Burney 21 was in that get-together or you wouldn’t call it a 22 meeting. Is this — 23 A. That’s the one. 24 Q. — that document? 25 A. Yeah. 123: 1 Q. Okay. Do you know whether Holly Burney 2 signed this? Is that her signature there or — 3 A. That is her signature. 4 Q. Okay. And is that her handwriting there 5 with those two noes? 6 A. Yes. … 13 A. I was there and I can definitively tell 14 you that she wrote no and no. Exhibit 3 to Egan Dec. Thus, the defendants in this case have admitted that Ms. Burney was terminated for opposing an illegal tip pool policy. That is sufficient for summary judgment. Ms. Burney provides a more detailed history of events in her Declaration submitted herewith. Starting in February of 2014, Scott Dolich started telling the employees in staff meetings that there were going to be big changes to the tip pool that they would not like. Burney Dec. at ¶ 2. He told them that he did not want Anna Josephson hosting, servicing, or managing the floor, that she was going to be the General Manager in the office, and that she would get a 1-point share in the tip pool for every single shift. Id. Ms. Burney asked if Ms. Josephson would get the point if she was there or not. Id. Mr. Dolich said, “every day, Holly Burney” (he and Ms. Josephson called her by her full name). Id. Mr. Dolich then said that for her 1 point, Ms. Josephson will be doing a pre-service meeting at 4:45 pm every day. Id. Ms. Burney said, “not on the days that she isn’t working.” Id. Ms. Burney was the only person who voiced concerns in the meetings. Id. Nobody asked any questions about the policy in the meetings, though the employees had all agreed outside the meetings that they hated the new policy and that none of them though it was legal. Id. Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 12 of 31 Plaintiffs’ Motion for Summary Judgment Page 13 Nancy Allison and Ms. Burney and some other employees agreed that they thought that management receiving tips was illegal, and they agreed to look into it. Id. at ¶ 3. Ms. Burney called the Wage and Hour Division and an attorney to ask about the legality of the tip pool policy. Id. One shift in mid-March, Ms. Burney was watching manager Nate Smith do the paperwork at the end of the night and saw that he had assigned himself 5 points. Id. at ¶ 4. Ms. Burney confronted him about this, because in addition to it being illegal for managers to participate in the tip pool at all, he only hosted, which is normally worth 2 points. Id. Nate Smith commented that unfortunately, nobody would be making much money with Ms. Josephson getting 1 point and him being made a 5-point host. Id. Ms. Burney was there, and Nan Allison was there. Id. This was the first time that they found out that the new tip pool policy had already been implemented. Id. Ms. Burney vigorously objected to Mr. Smith, both on the basis that they thought his receiving tips at all was illegal, and because it was unfair for him to get full server points when he only hosted and did none of the side work. Id. He said that he would look into it with Anna Josephson, but when Ms. Burney checked the sheet the next day, he was still listed as getting a full five points. Id. He said that Ms. Josephson told him this is the way it has to be and he had no control over it. Id. On March 20, 2014, Ms. Burney texted Mr. Dolich and asked to chat with him. Id. at ¶ 5. He replied to meet him at 12:30 pm, and they met at Urban Grounds, a coffee shop in Northwest Portland. Id. They were alone at a table. Id. Ms. Burney informed Mr. Dolich that she had talked to the Wage and Hour Division and an attorney, and that the tip pool was not legal. Id. Mr. Dolich told her that this was his restaurant, his tip pool idea, his structure, and what he wanted to do in his restaurant. Id. He told her that he designed the tip pool, not Ms. Josephson, and that it was legal and fair and he stood behind it. Id. He said that he knew Ms. Burney had talked to manager Nate Smith about his share of the tip pool, and that it was Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 13 of 31 Plaintiffs’ Motion for Summary Judgment Page 14 going to stay the same. Id. In the staff meeting later that day, Mr. Dolich passed out the official written tip pool policy and asked that the employees sign it. Id. at ¶ 6. Ms. Burney was the only one who did not sign it right away; she put it in her purse. Id. There was no deadline discussed for turning it in, and she wanted to show the policy to an attorney. Id. She did not agree with the policy, because it stated that she was voluntarily giving up her tips, and she did not voluntarily give up her tips. Id. She said that she thought this was illegal, and that she thought this was just a way for Mr. Dolich to make more money, and he said, “What do you expect from a Jew?” Id. This was a common excuse that he said whenever there was something financial that he did not want to talk about. Id. On April 5, manager Nate Smith told Ms. Burney that they had not received her signed tip pool agreement. Id. at ¶ 7. Ms. Burney agreed with him and told him, “I’m not going to sign it.” Id. He paused for a second and asked her, “why aren’t you going to sign it?” Id. She told him, “I don’t agree with it, and I don’t think it is legal.” Id. A couple of minutes later, Mr. Smith addressed Ms. Burney again by saying, “I can tell you from me to you I know for a fact that Scott had a lawyer look at it and it’s totally legit/legal.” Id. He said that he would have to talk to Anna Josephson. Id. A short while later, Mr. Smith told Ms. Burney, “we need to talk to you in the office.” Id. at ¶ 8. She said, “OK.” Id. He followed her into the office at about 4:40 pm. Id. Ms. Burney entered the office and sat at Mr. Dolich’s desk. Id. Mr. Smith closed the door and sat down. Id. Ms. Josephson was already seated at her desk. Id. Ms. Josephson addressed Ms. Burney as “Holly Burney,” like she usually did. Id. She asked her, “So why won’t you sign it?” Id. Ms. Burney explained that, “I don’t agree with it and I don’t think it’s legal.” Id. Ms. Josephson took a deep breath and told Ms. Burney, “ok, so you have two options,” and patted a stack of paperwork on her desk. Id. “You can either sign the tip pool agreement or chose to terminate Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 14 of 31 Plaintiffs’ Motion for Summary Judgment Page 15 your employment at Park Kitchen.” Id. Ms. Burney explained that, “I do not feel comfortable signing something I don’t agree with but that doesn’t mean I don’t want to work here. I just don’t agree with it.” Id. Ms. Josephson asked again, “So then why won’t you just sign it?” Id. Ms. Burney repeated that “I don’t think it’s fair or right or legal.” Id. Ms. Josephson then explained that, “legally you can’t be employed by Park Kitchen if you don’t agree to the tip pool.” Id. at ¶ 9. Ms. Josephson said “I really wish it didn’t have to be this way. I don’t understand why you won’t just sign the damn paper.” Id. Ms. Josephson asked, “So am I fired?” Id. Ms. Josephson just stared at her. Id. Ms. Josephson then handed Ms. Burney the stack of papers she had patted earlier and handed them to her. Id. It was her last hourly paycheck, tip check, and a Park Kitchen Notice of Termination. Id. Ms. Josephson explained the paper as an agreement to terminate. Id. at ¶ 10. Ms. Burney read the paper and asked, “why do I need to sign this if it says Employee next to the signature line, when I am being forcefully terminated? It should say ‘terminated employee’.” Id. Ms. Josephson scoffed and said, “you are an employee until you sign it.” Id. Ms. Burney argued that, “I’m being fired for not signing a stupid piece of paper and now you want me sign this? It should read correctly.” Id. Ms. Josephson said, “Fine. Do you want me to change it?” Id. Ms. Burney stated, “Yes, I do because paperwork seems to be a big deal lately.” Id. Ms. Josephson turned to her computer, but printed out the same paper again. Id. at ¶ 11. Ms. Burney read it out loud. Id. “Do you wish to terminate your own employment at Park Kitchen?” Id. There is a line for what she presumed was to write yes or no. Id. Ms. Burney wrote NO. Id. “Do you wish for Park Kitchen to terminate your employment?” Id. Ms. Burney asked “what is this? I don’t wish for either of these things. I just don’t want to sign the tip pool agreement.” Id. Ms. Burney wrote NO for both. Id. Exhibit 1 to Burney Dec. (PK 000108) is a copy of that notice. Id. Ms. Josephson asked Ms. Burney again why she wouldn’t sign the tip pool policy. Id. at Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 15 of 31 Plaintiffs’ Motion for Summary Judgment Page 16 ¶ 12. Ms. Burney explained that she could get on the computer and make up an entire Power Point presentation with graphs and documents, but that didn’t make the policy fair or legal. Id. She said, “So what, so I don’t agree with the tip pool. I still come to work when I am scheduled and I still bust my ass when I am here. I just don’t agree with it. That doesn’t mean you have to fire me.” Id. They fired her anyway. Id. at ¶ 13. Ms. Burney was given no other reason for her termination other than her refusal to agree to the illegal tip pool policy. Id. She did not sign the policy, because she knew that the tip pool was against the law, based on advice from her attorney, and it takes the tips that customers think that employees are getting and it is not going to employees who are providing the service. Id. This is unfair to the customers and to the employees. Id. “The elements of a retaliation claim under § 15(a)(3) of the FLSA’s anti-retaliation provision are: (1) the plaintiff must have engaged in statutorily protected conduct under § 15(a)(3) of the FLSA, or the employer must have erroneously believed that the plaintiff engaged in such conduct; (2) the plaintiff must have suffered some adverse employment action; and (3) a causal link must exist between the plaintiff’s conduct and the employment action.” Singh v. Jutla & C.D. & R’s Oil, Inc., 214 F.Supp.2d 1056, 1059 (N.D.Cal. 2002). As shown above, Ms. Burney obviously complained about her employer’s illegal conduct, she was terminated, and defendants admit that her termination was a direct result of that complaint. Summary judgment is therefore appropriate. The parties have stipulated that Ms. Burney’s back wages incurred as a result of her termination totaled $14,175.00. Exhibit 6 to Egan Dec. This is the back-wage amount that she received in connection with the NLRB settlement. Ms. Burney is therefore not seeking the award of those back wages in this suit. She is, however, seeking liquidated damages in that same amount ($14,175.00), per the FLSA’s liquidated damages provision, 29 U.S.C. § 216(b), Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 16 of 31 Plaintiffs’ Motion for Summary Judgment Page 17 as well as non-economic damages in the same amount ($14,175.00), and punitive damages of $113,400.00 (four times $28,350.00, the sum of her economic and non-economic damages), for a total of $141,750.00 in damages from her retaliation claim. B. Nancy Allison’s retaliation claim Scott Dolich confirmed that Nancy Allison and Holly Burney were the only ones who complained about the illegal tip pool, both on their own behalves and on behalf of the other employees: 13 Q. Did anybody ever express any disagreement 14 with the tip pool policies? 15 A. The biggest one, the biggest incidents of 16 that, were Nan and Holly. 17 Q. Tell me about that. 18 A. With Nan Allison, she would report on 19 behalf of others, other staff members, that other 20 staff members were not happy with the tip pool that 21 we created or that we reorganized in early 2014. Deposition of Scott Dolich (Exhibit 2 to Egan Dec.) at p. 41. He continued: p. 43 25 I should also add that with Nan, Nan 44: 1 continued to express concern for the rest of the 2 staff members about the fact that — she was 3 reporting to us — us being myself, Anna [Josephson] and Nate [Smith] — 4 that the staff was — none of the staff was on board 5 with it, that none of them liked the new tip pool 6 policy or the new service policy in general, which 7 concerned us. So we checked into that personally, 8 myself, Anna, Nate. And what we were told by the 9 staff did not corroborate with what Nan was saying. 10 So we asked Nan that if she were to get 11 information from other staff members and staff 12 members were expressing concern, instead of getting 13 into a he said/she said situation, that they come 14 talk to one of us, the other staff. … 46: … 14 Q. Anybody else complain about the tip pool 15 besides Nan and Holly? 16 A. Not that I’m aware of. … Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 17 of 31 Plaintiffs’ Motion for Summary Judgment Page 18 54: 5 In many ways, [Anna Josephson] was responsible for the 6 overall training of the staff. So that’s how we 7 came up with that one point that Anna Josephson 8 would get. We discussed that with the staff, and 9 they felt that there was value to that, with the 10 exception of Holly. At first, Nan had been voicing 11 other people’s — other staff members’ opposition to 12 that, but she herself did not voice her own 13 opposition to that. Anna Josephson confirmed that Ms. Allison was not disciplined during her employment, other than her termination: 6 Q … Do you know whether Nan Allison had 7 any discipline during the time that she was employed 8 at Park Kitchen? Other — unrelated to her 9 termination, before that. 10 A. She had no written discipline. 11 Q. Okay. Was there any unwritten discipline? 12 A. No. Deposition of Anna Josephson, Exhibit 3 to Egan Dec., p. 76. Ms. Allison first expressed her opposition to the tip pool when a “service fee” was added to the private party invoices, but it all went to the managers and back-of-the-house. Declaration of Nancy Allison at ¶ 2. She did so in a meeting with Mr. Dolich, alone in his office, in late 2013, or early 2014. Id. at ¶¶ 2–3. Ms. Allison told him that she had never complained about the private dining tip pool policy before, but it seemed unfair to her that customers were now paying a total of 25% in automatic gratuities and fees which greatly reduced the possibility of the customer giving a “bump” to the servers (an extra gratuity that went entirely into the tip pool). Id. She told him specifically that it was unfair that only 13% was going to the tip pool, and the managers and back of the house were getting almost 50% of the tips, not the servers. Id. This was one of many aspects of the tip pool that she complained that she and the other employees thought was illegal. Id. Coworkers continued to complain to Ms. Allison about this policy every time they had a private party and had to fill out the paperwork for the gratuities. Id. She would then share this information with management at the next meeting. Id. Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 18 of 31 Plaintiffs’ Motion for Summary Judgment Page 19 Ms. Allison had another private meeting with Mr. Dolich about Ms. Josephson. Id. at ¶ 4. She told him that she wanted Ms. Josephson’s sitting-in-the-office-but-taking-tips-as-a- server to stop. Id. Ms. Josephson stopped working service shifts altogether around this time. Id. Ms. Allison also relayed complaints from other employees, specifically Beth Harding and Brandon Page regarding another tip-receiving manager not doing his share of the side work to qualify for full tips. Id. The manager would do paperwork slowly instead. Id. Ms. Allison also complained about this at a manager’s meeting, about a week after her complaints about Ms. Josephson getting tips for not working. Id. Park Kitchen hired a brand consultant who came in and reviewed the restaurant around Christmas of 2013. Id. at ¶ 5. He made many suggestions regarding the menu, the wine list, and how the service should be homogenized, with a general manager who does not serve tables. Id. Mr. Dolich changed the tip pool again sometime around February 2014. Id. at ¶ 6. Ms. Josephson had been serving tables during one or two shifts a week and hosting, but Mr. Dolich decided that she should not work on the floor, but rather focus on her other responsibilities. Id. He also decided that Ms. Josephson should receive 1 point of the tip pool (servers were 5 points, hosting was 2, kitchen was 2 points as a whole) for every shift, even if she was not working at all that day. Id. On a busy night, 1 point was over $50. Id. Ms. Allison was approached by and talked with her coworkers constantly about this change and how they did not like it. Id. They agreed that Ms. Allison would talk to upper management to put a stop to it because it was not fair and possibly illegal, since the general manager was getting tips but not serving tables anymore. Id. In about mid-March 2014, Ms. Allison was complaining in a manager’s meeting, for herself and on behalf of others, about the fairness of Ms. Josephson getting the 1 point even though she was not doing the work to justify it, and that the employees thought it was illegal. Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 19 of 31 Plaintiffs’ Motion for Summary Judgment Page 20 Id. at ¶ 7. Holly Burney and Brandon Page were near the meeting on the floor and commented that Ms. Allison was in there fighting for them. Id. Either Mr. Dolich or Ms. Josephson said that the next week, Nate Smith could fill Ms. Allison in on what happened at the meeting. Id. Ms. Allison clarified with Anna Josephson that this meant she was no longer allowed in the manager’s meetings, and Ms. Josephson said yes. Id. In about mid-March 2014, Ms. Allison was called in to work a party, and Nate Smith was going to host. Id. at ¶ 8. As they were cleaning up at the end of the evening, Mr. Smith told Ms. Burney and Ms. Allison that nobody would be making much money with Ms. Josephson getting 1 point and him being made a 5-point host. Id. Ms. Allison was shocked that she found out about this, a pay cut, from Mr. Smith in this way. Id. This change was unfair because the work load of a host is far less than that of a server, and he was a salaried manager, who shouldn’t get tips in the first place. Id. She was upset and went to the other side of the restaurant to gather her thoughts while Ms. Burney laid into Mr. Smith telling him how unfair this was. Id. Ms. Allison had a quieter conversation with Mr. Smith later that night. Id. He told her that it was fair because he worked the longest hours. Id. She told him that he is salaried and the rest of them didn’t have set hours and have less job security. Id. She asked him how many times she had to come into work to find out that she got a pay cut. Id. Mr. Smith felt that he was deserving of the 5 points and Ms. Allison vocally did not agree that it was legal and neither did Ms. Burney. Id. That night, Ms. Allison also saw a mock-up of a new schedule, and there was a brand-new employee on a Friday-night shift, a busy shift that Ms. Allison had recently requested. Id. Ms. Josephson had told Ms. Allison that there was no room for her to work on Friday nights. Id. Shortly after that confrontation, Ms. Allison was called into a private meeting with Mr. Dolich on March 20, 2014. Id. at ¶ 9. He told her that he had his reasons for having the tip pool the way it is, and he does not include himself in tip pooling. Id. He specifically said, Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 20 of 31 Plaintiffs’ Motion for Summary Judgment Page 21 “Nan, your biggest failing is assuming that any tips belong to you. The tips belong to me, and I can do what I want with them.” Id. Also in that meeting, he said that he didn’t like Ms. Allison having discussions about the illegality of the tip pool “behind his back” with the other employees. Id. Mr. Dolich tried to get Ms. Allison to quit instead of terminating her, asking, “what if we took away your wine buying job, would you still want to work here?” Id. When she asked about the Friday night shift, he told her, “We need to make room for new hires who are more committed to Park Kitchen,” and, “Moving forward, you can expect to only work Sunday and Monday night.” (The slowest shifts.) Id. After that meeting, Ms. Allison had a strong fear of losing her job. Id. at ¶ 10. That is why, when Mr. Dolich presented the new written tip pool policy at the staff meeting later that same day, she signed it. Id. The other employees in the meeting all signed it as well, except for Ms. Burney. Id. Ms. Burney took the policy with her, but she never signed it and turned it in. Id. Ms. Allison had some general understanding about tip pool laws in Oregon, and Ms. Burney and she each independently did some research to find out what the law really was. Id. The law said that only traditionally tipped employees could participate in a tip pool, and Mmes. Burney and Allison had dinner and talked about that. Id. They then talked to their coworkers about the law and whether or not sharing the tip pool with Ms. Josephson and manager Nate Smith was legal and how to find out if it was legal. Id. Ms. Burney got in contact with an attorney to discuss the matter. Id. Despite Ms. Allison’s agreeing to the new tip pool, Scott Dolich called her the morning after the staff meeting and fired her over the phone. Id. at ¶ 11. Mr. Dolich told her, “The last thing I need is a labor union breathing down my neck.” Id. Ms. Allison understood these comments to obviously refer to her complaining about the illegal tip pool, on behalf of herself and the other employees. Id. Later, Anna Josephson said that Ms. Allison’s termination had been because of her “toxic attitude,” though she had never been disciplined in the almost four Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 21 of 31 Plaintiffs’ Motion for Summary Judgment Page 22 years she worked there. Id. Ms. Burney was terminated about two weeks later, after she refused to sign the new tip policy. Id. The only two employees who researched and complained in person to management about the tip pool were terminated within two weeks of each other. Id. “The elements of a retaliation claim under § 15(a)(3) of the FLSA’s anti- retaliation provision are: (1) the plaintiff must have engaged in statutorily protected conduct under § 15(a)(3) of the FLSA, or the employer must have erroneously believed that the plaintiff engaged in such conduct; (2) the plaintiff must have suffered some adverse employment action; and (3) a causal link must exist between the plaintiff’s conduct and the employment action.” Singh v. Jutla & C.D. & R’s Oil, Inc., 214 F. Supp. 2d 1056, 1059 (N.D. Cal. 2002). As laid out above, Ms. Allison obviously complained about her employer’s illegal tip pool, and she was terminated. While defendants have not admitted the reason for Ms. Allison’s termination like they did with Ms. Burney, the causal link between her termination and her complaint is obvious from the proximity in time for the termination following the complaints, the fact that the only two people terminated were also the only two people who complained to management about the policy, and the lack of any other non-pretextual reason for her termination. Ms. Allison is therefore entitled to summary judgment. The parties have stipulated that Ms. Allison’s back wages incurred as a result of the termination totaled $23,320.00. Exhibit 6 to Egan Dec. This is the back-wage amount that she received in connection with the NLRB settlement. Ms. Allison is therefore not seeking the award of those back wages in this suit. She is, however, seeking liquidated damages in that same amount ($23,320.00), per the FLSA’s liquidated damages provision, 29 U.S.C. § 216(b), as well as non-economic damages in the same amount ($23,320.00), and punitive damages of $186,560.00 (four times $46,640.00, the sum of her economic and non-economic damages), for a total of $233,200.00 in damages from her retaliation claim. Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 22 of 31 Plaintiffs’ Motion for Summary Judgment Page 23 C. Collective action tip theft claim (damages) The documents by which the collective members’ damages are calculated are voluminous. Rather than introduce all of them, plaintiffs have consolidated the underlying time and pay records into a spreadsheet. A copy of that spreadsheet was produced to the defendants on March 21, 2017, and they have not objected that it is inaccurate. It is produced as Exhibit 1 to the Declaration of Michèle Lauzier filed herewith. Let’s take the period from January 16 through 31, 2014, which appeared on the February 5, 2014 Park Kitchen paychecks (the same example previously discussed in Dkt. 119). The raw payroll information for that period is attached as Exhibit 2 to the Declaration of Michèle Lauzier filed herewith, and it yields the following tip-eligible employees’ information for that period: Name Hours Rate Nominal Wages Allison, Nancy E †2 60.83 $18.67 $1135.64 Burney, Holly 37.05 $9.10 $337.16 Garrels, Teal 4.86 $9.10 $44.23 Harding, Beth 35.99 $9.10 $327.51 Page, Brandon 68.61 $9.10 $624.35 Because the nominal pay rates of these five tip-eligible employees were above the federal minimum wage, the employer is going to be able to steal some money from each employee before triggering an FLSA private right of action. Below is each employee’s Trejo buffer (i.e., the amount of tips that the employer can steal without running afoul of the federal minimum wage): Name Nominal Rate /hr FMW /hr Trejo buffer per hour Total Hours Total $ Nom. Wages Total $ Fed. MW Total $ Trejo buffer Allison, Nancy E $18.67 /hr $7.25 /hr $11.42 /hr 60.83 $1135.64 $441.02 $694.62 Burney, Holly $9.10 /hr $7.25 /hr $1.85 /hr 37.05 $337.16 $268.61 $68.55 † Nancy Allison received a $527.34 bonus during this pay period, which is added to her wages to calculate whether she received the federal minimum wage for the period. See, e.g., 29 C.F.R. § 531.60 (“In accordance with section 3(m), a tipped employee’s regular rate of pay includes … cash wages including commissions and certain bonuses paid by the employer”. ). Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 23 of 31 Plaintiffs’ Motion for Summary Judgment Page 24 Garrels, Teal $9.10 /hr $7.25 /hr $1.85 /hr 4.86 $44.23 $35.23 $9.00 Harding, Beth $9.10 /hr $7.25 /hr $1.85 /hr 35.99 $327.51 $260.93 $66.58 Page, Brandon $9.10 /hr $7.25 /hr $1.85 /hr 68.61 $624.35 $497.42 $126.93 As the Court can see, the Trejo buffer is equal to the amount of money that can be stolen from each employee before that employee’s wages fall below the federal minimum wage. Thus, ( Nominal Wage - Fed. MW = Trejo buffer ) and (Fed. MW + Trejo buffer = Nominal Wage ). If the amount of money stolen from each employee is less than their Trejo buffer, then they do not drop below the federal minimum wage, and there is no FLSA private right of action. To find the total amount of stolen tips for a given pay period, we total the tips received by employees in non-tip-eligible positions. The following employees received pay stubs for the pay period at issue: Name Tip‐eligible? Tips received Ball, Chevonne N 531.34 Bowers, Brennan N 106.70 Cleveland, Daniel N 106.70 Dixon, Laura A N 106.70 Gregga, Brendan N 106.70 Josephson, Anna E N 175.88 Ricalde, Luis N 106.70 Romero, Everardo N 106.70 Sapp, David N 106.70 Smith, Nate N 1585.86 Snyder, Ethan N 106.70 Allison, Nancy E Y 667.27 Burney, Holly Y 977.10 Garrels, Teal Y 186.40 Harding, Beth Y 735.35 Page, Brandon Y 1569.55 Thus, together, managers and kitchen staff received a total of $3,146.68 in tips during that pay period, which rightfully belonged to the five tip-eligible employees listed above. Dividing that stolen amount among the five tip-eligible employees in proportion to their hours worked yields the following tips stolen from each employee: Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 24 of 31 Plaintiffs’ Motion for Summary Judgment Page 25 Name % of hours Share of stolen tips Allison, Nancy E 29% $923.18 Burney, Holly 18% $562.29 Garrels, Teal 2% $73.76 Harding, Beth 17% $546.20 Page, Brandon 33% $1041.25 And finally, comparing each tip-eligible employee’s share of stolen tips with the Trejo buffer yields the amount of their claim that is subject to an FLSA minimum-wage private right of action (i.e., the amount by which the employee has been reduced below the federal minimum wage in this pay period): Name Share of stolen tips Trejo buffer FLSA MW damages Allison, Nancy E $923.18 $694.62 $228.56 Burney, Holly $562.29 $68.55 $493.74 Garrels, Teal $73.76 $9.00 $64.76 Harding, Beth $546.20 $66.58 $479.62 Page, Brandon $1041.25 $126.93 $914.33 That is the method that is used to calculate a given employee’s FLSA minimum-wage damages for a given pay period. By totaling up each collective member’s FLSA minimum- wage damages over all of the pay periods in which they worked, we get the following total damages for each collective member (with an equal amount for liquidated damages): Collective Member FLSA MW damages Liquidated Damages Total Allison, Nancy E $33,456.70 $33,456.70 $66,913.39 Baiz‐Escobedo, Andrea $31,966.01 $31,966.01 $63,932.02 Bartlett, Mary $13,609.97 $13,609.97 $27,219.94 Boden, Lauren A $15,645.54 $15,645.54 $31,291.09 Bohrer, Bradford $23,838.61 $23,838.61 $47,677.23 Breuer, Nicola $509.57 $509.57 $1,019.13 Burney, Holly $16,930.53 $16,930.53 $33,861.06 Cordeiro, Tiffany $22,051.67 $22,051.67 $44,103.34 Elroy, Rebecca $1,629.32 $1,629.32 $3,258.65 Garrels, Teal $10,173.50 $10,173.50 $20,346.99 Gower, Tara L $54,207.94 $54,207.94 $108,415.88 Harding, Beth $31,978.04 $31,978.04 $63,956.09 Hillenkamp, Nathanael $14,861.83 $14,861.83 $29,723.67 Holifield, Faith $12,399.39 $12,399.39 $24,798.78 Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 25 of 31 Plaintiffs’ Motion for Summary Judgment Page 26 Collective Member FLSA MW damages Liquidated Damages Total Page, Brandon $8,931.95 $8,931.95 $17,863.89 Pavey, Eric $1,214.34 $1,214.34 $2,428.68 Petersen, Nicholaus $9,688.07 $9,688.07 $19,376.13 Ternes, Deanna $5,914.73 $5,914.73 $11,829.47 Titus, Camille $17,212.44 $17,212.44 $34,424.89 Plaintiffs therefore move for summary judgment awarding damages to each of the above- listed 19 collective members 3 in the above amounts. D. Defendants’ affirmative defenses In their operative Answer (the Amended Answer to Second Amended Complaint, Dkt. 114), Defendants’ affirmative defenses are as follows: FIRST AFFIRMATIVE DEFENSE (Failure to State a Claim) 12. Plaintiffs fail to state a claim upon which relief can be granted. The Court has already granted plaintiffs summary judgment on their tip theft claims, and there is no obvious way in which plaintiffs have failed to state a retaliation claim. There is therefore no identified legal or factual basis for this defense, and plaintiffs are entitled to summary judgment. SECOND AFFIRMATIVE DEFENSE (Good Faith, Legitimate Business Purpose) 13. All employment decisions made regarding plaintiffs were made in good faith and for legitimate, non-discriminatory business reasons. To the extent that this is merely a denial of plaintiffs’ allegations that they were terminated for retaliatory purposes, it is not a true affirmative defense and should be struck. To the 3 Suzanne Latham, Mark MacMinn, and Elizabeth McElligott filed opt-ins but, after the calculations were completed, did not have any FLSA minimum-wage damages in the statute- of-limitations period. Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 26 of 31 Plaintiffs’ Motion for Summary Judgment Page 27 extent that it is an allegation that defendants’ tip theft was non-willful, that allegation is addressed below with regard to the Fifth Affirmative Defense (Non-Willful). To the extent that it seeks immunity under 29 U.S.C. § 259, it fails because (as this Court has already ruled), the defendants’ tip pool is not in conformity with Department of Labor regulations that were issued prior to the beginning of the statue-of-limitations period in this case. To the extent that this defense may seek to escape liquidated damages under 29 U.S.C. § 260, defendants have not shown that the tip theft was “in good faith and that [they] had reasonable grounds for believing that [the] act or omission was not a violation of the Fair Labor Standards Act of 1938, as amended.” The good-faith inquiry asks “how a reasonably prudent person would have acted under the same or similar circumstances and requires that the employer have honesty of intention and no knowledge of circumstances which ought to put him upon inquiry.” In re Farmers Ins. Exch. Claims Representatives’ Overtime Pay Litig., 336 F.Supp.2d 1077, 1110 (D.Or. 2004), aff’d in pertinent part 481 F.3d 1119 (9th Cir.2007)(internal quotations and citations omitted). First of all, there is no possible objectively reasonable ground for believing that the tip pool in this case complied with the FLSA, as the Department of Labor regulations clearly outlawed it since before the beginning of the statute of limitations period in this case. Second, Mr. Dolich knew of legal cases pending at the time he changed the tip pool in 2014 that challenged similar tip pooling, yet he continued his tip pool. Dolich Deposition, Exhibit 2 to Egan Dec., p. 42. “Congress did not intend the good faith defense to apply where an employer had knowledge of conflicting rules and chose to act in accordance with the one most favorable to him.” Id. Finally, after this case was filed, Mr. Dolich could no longer claim ignorance of the tip pool’s illegality, yet he continued the same tip pool for another two-plus years. These actions do not demonstrate that Mr. Dolich had an honest intention to follow the law, and a host of facts ought to have put him on inquiry notice. There is no legal or factual basis for this defense, and plaintiffs are Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 27 of 31 Plaintiffs’ Motion for Summary Judgment Page 28 entitled to summary judgment. THIRD AFFIRMATIVE DEFENSE (Statute of Limitations) 14. All or part of plaintiffs’ claims are barred by the applicable statutes of limitations to the extent their claims are premised on events occurring outside the statutory limitations period. Holly Burney and Nancy Allison filed this Complaint within three months of their termination. [Dkt. 1]. None of the collective members are seeking tip theft damages under the FLSA more than three years prior to the earliest of (1) the date they filed their opt-in consent to join in this case, or (2) the date this Court tolled the statute of limitations for absent collective members (9/26/2014 in Dkt. 21). See Exhibit 1 to Lauzier Declaration. There is therefore no legal or factual basis for a statute of limitations defense, and plaintiffs are entitled to summary judgment. FOURTH AFFIRMATIVE DEFENSE (Failure to Mitigate) 15. Plaintiffs have failed to mitigate their alleged damages. Holly Burney diligently searched for work after her termination during all of the time from her termination until the cutoff date for back wages in the NLRB settlement. Burney Dec. at ¶ 14. Nancy Allison participated in the Oregon Employment Department’s entrepreneur program, receiving training and assistance in opening and running a business in lieu of actively searching for replacement hourly employment. Allison Dec. at ¶ 12. She would have continued working for defendants and building her business on the side, however, had she not been terminated. Id. Defendants have not identified any factual or legal basis for any failure to mitigate damages FIFTH AFFIRMATIVE DEFENSE (Non-Willful) 16. Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 28 of 31 Plaintiffs’ Motion for Summary Judgment Page 29 Any violation of the law by Defendants was non-willful. An employer need not violate the statute knowingly for its violation to be considered “willful” under § 255(a). Alvarez v. IBP, Inc., 339 F.3d 894, 908 (9th Cir.2003), aff'd, 546 U.S. 21 (2005). The three-year statute of limitations may be applied “where an employer disregarded the very ‘possibility’ that it was violating the statute,” Id., 339 F.3d at 908–09 (citing Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132, 141 (2d Cir.1999)). Mr. Dolich knew about the FLSA’s requirements but took no affirmative action to ensure that his tip pool policy was legal: 23 Q. In addition to Tony Motschenbacher — I 24 keep not knowing if I pronounce that right — was 25 there any other source of information that you 1 checked out or used to determine whether tip pool 2 policies would be implemented or not? 3 A. Not on the legality of it. 4 Q. Okay. And how about on other aspects of 5 it? 6 A. Not on the tip pool. Testimony of Scott Dolich in the 30(b)(6) deposition at Exhibit 4 to Egan Dec. at 151-52. Mr. Dolich’s lawyer also confirmed that Mr. Dolich sought no legal advice on the topic prior to 2014: 4 Q. So that being said, when was the first 5 time that you either communicated with Mr. Dolich or 6 provided any advice to him regarding a tip pool at 7 one of these restaurants? 8 A. March of 2014. 9 Q. Okay. So you didn’t provide any advice to 10 him prior to that time about tip pools? 11 A. Correct. 12 Q. And I’ve reviewed the documents that you 13 produced in response to our subpoena. Thank you for 14 getting that done in a timely manner. That allows 15 us all to proceed more quickly with the lawsuit. 16 I didn’t see anything in there before 17 approximately March of 2014, and I just wanted to 18 confirm that that was because there was nothing 19 before, you’re not limiting it to that because of 20 any objection or anything? 21 A. That’s correct. Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 29 of 31 Plaintiffs’ Motion for Summary Judgment Page 30 Deposition of Tony Motschenbacher, Exhibit 5 to Egan Dec. at 12. Thus, Mr. Dolich was at least reckless in disregarding the possibility that his tip pooling policy violated the FLSA. Flores v. City of San Gabriel, 824 F.3d 890, 906 (9th Cir.2016), cert. denied sub nom. City of San Gabriel, Cal. v. Flores, No. 16-911, 2017 WL 274839 (U.S. May 15, 2017)(“[T]he record yields no evidence of affirmative actions taken by the City to ensure that its classification of its cash-in-lieu of benefits payments complied with the FLSA. Indeed, it is undisputed that the City failed to investigate whether its exclusion of cash-in-lieu of benefits payments from the regular rate of pay complied with the FLSA at any time following its initial determination that the payments constituted a benefit.”); Alvarez v. IBP, Inc., 339 F.3d 894, 909 (9th Cir. 2003), aff’d, 546 U.S. 21 (2005)(“IBP was on notice of its FLSA requirements, yet took no affirmative action to assure compliance with them.”); Haro v. City of Los Angeles, 745 F.3d 1249, 1258 (9th Cir.2014)(“An employer who knows of a risk that its conduct is contrary to law, yet disregards that risk, acts willfully. The employer must take affirmative action to assure compliance.”)(citations omitted). Plaintiffs are therefore entitled to summary judgment on the willfulness defense, and a three-year statute of limitations on their tip theft claims. SIXTH AFFIRMATIVE DEFENSE (Set Off/Prior Settlement) 17. A portion of the monetary relief plaintiffs seek has already been paid to them through as [sic] a settlement in a related matter before the National Labor Relations Board (“NLRB”) and cannot be recovered again through this action. As discussed above in connection with Nancy Allison’s and Holly Burney’s retaliation claims, plaintiffs are not seeking back pay in this lawsuit; those amounts have already been stipulated by defendants and paid in connection with the NLRB settlement. The only amounts being sought on this claim are non-economic damages, liquidated damages, and punitive damages, none of which were paid in the NLRB settlement. The defense is therefore Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 30 of 31 Plaintiffs’ Motion for Summary Judgment Page 31 moot and plaintiffs are entitled to summary judgment. In summary, defendants have not provided any evidence or legal authority in support of any of these affirmative defenses. Plaintiffs are therefore entitled to summary judgment. Respectfully submitted this 12th day of June, 2017 JON M. EGAN, P.C. /s/ Jon M. Egan ______________ JON M. EGAN, OSB # 002467 Attorney for Plaintiffs Case 3:14-cv-01005-AC Document 188 Filed 06/12/17 Page 31 of 31