United States District Court, E.D. Virginia, Norfolk Division
THOMAS E. PEREZ SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, Plaintiff,
YAMA, INC., d/b/a YAMA SUSHI RESTAURANT, and JING LIN, Defendants.
REBECCA BEACH SMITH CHIEF JUDGE
matter is before the court on the Defendants' Motion for
Summary Judgment ("Motion"), filed on October 13,
2016. ECF No. 15. On the same day, the Defendants also filed
an accompanying Memorandum in Support ("Defendants'
Memorandum"). ECF No. 16. On November 7, 2016, the
Plaintiff filed an Opposition to Defendants' Motion for
Summary Judgment, ECF No. 20, and a Memorandum in Support
("Plaintiff's Memorandum"), ECF No. 21. On
November 14, 2016, the Defendants filed a Response in Support
of their Motion for Summary Judgment. ECF No. 22.
November 16, 2016, this court referred the Motion to United
States Magistrate Judge Douglas E. Miller, pursuant to the
provisions of 29 U.S.C. § 636(b) (1) (B) and Federal
Rule of Civil Procedure 72(b), to conduct necessary hearings,
and to submit to the undersigned district judge proposed
findings of fact and recommendations of law for the
disposition of the Motion for Summary Judgment. ECF No. 27.
The Magistrate Judge filed a Report and Recommendation
("R&R") on December 6, 2016. ECF No. 28. The
Magistrate Judge recommended denying the Defendants'
Motion for Summary Judgment. Id. at 2. On December
16, 2016, the Defendants filed Objections to the Magistrate
Judge's Report and Recommendation. ECF No. 31. On
December 21, 2016, the Plaintiff filed a Response to the
Defendants' Objections. ECF No. 32.
Motion for Summary Judgment
judgment under Federal Rule of Civil Procedure 56 is
appropriate when the court, viewing the record as a whole and
in the light most favorable to the nonmoving party, finds
that there is no genuine issue of material fact and that the
moving party is entitled to judgment as a matter of law.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248-50 (1986). "[A]t the summary judgment stage the
judge's function is not himself to weigh the evidence and
determine the truth of the matter but to determine whether
there is a genuine issue for trial." Id. at
249. A court should grant summary judgment if the nonmoving
party, after adequate time for discovery, has failed to
establish the existence of an essential element of that
party's case, on which that party will bear the burden of
proof at trial. Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986). In essence, the nonmovant must present
"evidence on which the [trier of fact] could reasonably
find" for the nonmoving party. Anderson, 477
U.S. at 252.
defeat a motion for summary judgment, the nonmoving party
must go beyond the facts alleged in the pleadings, and rely
instead on affidavits, depositions, or other evidence to show
a genuine issue for trial. See Celotex, 477 U.S. at
324; see also M & M Med. Supplies & Serv., Inc.
v. Pleasant Valley Hosp., Inc., 981 F.2d 160, 163 (4th
Cir. 1993) ("A motion for summary judgment may not be
defeated by evidence that is 'merely colorable' or
'is not sufficiently probative.'") (quoting
Anderson, 477 U.S. at 249-50). Conclusory
statements, without specific evidentiary support, do not
suffice, Causey v. Balog, 162 F.3d 795, 802 (4th
Cir. 1998), nor does "[t]he mere existence of a
scintilla of evidence in support of the plaintiff's
position." Anderson, 477 U.S. at 252. Rather,
"there must be evidence on which the jury could
reasonably find for the plaintiff." Id.
Review of Magistrate Judge's R&R
to Rule 72(b) of the Federal Rules of Civil Procedure, the
court, having reviewed the record in its entirety, shall make
a de novo determination of those portions of the
R&R to which the Plaintiff has specifically objected.
Fed.R.Civ.P. 72(b). Objections must be "specific and
particularized." United States v. Midqette, 478
F.3d 616, 621 (4th Cir. 2007). The court may accept, reject,
or modify, in whole or in part, the recommendation of the
Magistrate Judge, or recommit the matter to him with
instructions. 28 U.S.C. § 636(b)(1).
Defendants object to the Magistrate Judge's determination
that there is a genuine dispute of material fact as to
whether the restaurant utilized a tip credit. Obj. at 1. The
Defendants state that there is "undisputed evidence .
that the employers did not keep any of the tips and Yama did
not seek a credit." Id.
Fair Labor Standards Act ("FLSA") allows employers
of "tipped employees" to satisfy the federal minimum
wage requirement by paying a base hourly rate of at least
$2.13 and accounting for the difference through tips the
employee receives. 29 U.S.C. § 203 (m) . The use of tips
to account for a portion of the minimum wage is known as a
"tip credit." 29 C.F.R. § 531.51. To utilize
the tip credit, the employer must notify employees that their
tips are being counted toward the minimum wage. 29 U.S.C.
§ 203(m). All such tips must be "retained by the
employee." Id. Participation in a "tip
pool, " in which some or all employees' tips are
collected for redistribution among a group of employees,
provides an exception to this retention requirement.
Id.; 29 C.F.R. § 531.54. Where participation in
a tip pool is mandatory, the pool must only include employees
who customarily and regularly receive tips, and the employer
must notify the employees of any required contribution
amount, only take a tip credit for the amount each employee
ultimately receives, and may not retain any of the tips for
any other purpose. See 29 C.F.R. § 531.54.
Defendants argue that servers were not tipped employees, and
that the restaurant did not utilize the tip credit. Obj. at
1. The Defendants have produced evidence that servers were
paid a flat hourly rate and were not allowed to retain tips.
Jiang Aff. ¶¶ 19-20. According to the Defendants,
this practice was memorialized at some point in its Employee
Handbook, id. at ¶ 25, and accordingly, §
203 (m) does not apply because the ...