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Spencer v. Macado's, Inc.

United States District Court, W.D. Virginia, Lynchburg Division

July 8, 2019

Jeffrey Spencer, Jr., ET AL., Plaintiffs,
v.
Macado's, Inc., Defendant.

          MEMORANDUM OPINION

          NORMAN K. MOON JUDGE

         This matter is before the Court upon Defendant Macado's, Inc.'s partial motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). (Dkt. 107). This case is a collective action brought under the Fair Labor Standards Act (FSLA) by current and former Macado's servers and bartenders who allege that Macado's has paid them below minimum wage in three distinct ways. First, Macado's allegedly required Plaintiffs to perform non-tip-producing tasks that were unrelated to their normal work while clocked in as tipped employees (a “dual jobs” claim). Second, Macado's allegedly required Plaintiffs to spend over twenty percent of their time on non-tip-producing tasks that were related to their normal work (a “side work” claim). Third, Macado's allegedly required Plaintiffs to perform unpaid work off the clock before their scheduled shifts.

         Macado's seeks to dismiss Plaintiffs' “dual jobs” and “side work” claims on the basis of a recent Department of Labor (DOL) opinion letter and Handbook update. The Court finds that these materials are not entitled to Auer or Skidmore deference, and the Court will therefore deny Macado's motion to dismiss.

         I. Legal Standard

         A motion to dismiss pursuant to Fed R. Civ. P. 12(b)(6) tests the legal sufficiency of a complaint to determine whether a plaintiff has properly stated a claim; it “does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). The Court must take all facts and reasonable inferences in favor of the plaintiff, disregard any legal conclusions, and not credit any formulaic recitations of the elements. See Iqbal v. Ashcroft, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 557 (2007).

         II. Factual & Legal Background

         A. Factual Background

         Plaintiffs originally filed this action on January 10, 2018. (Dkt. 1). On August 1, 2018, the Court granted Macado's first motion to dismiss in part, dismissing without prejudice Plaintiffs' “dual jobs” and “off-the-clock” claims, primarily because Plaintiffs had not provided sufficient factual specificity about how much time was spent on unrelated non-tip producing tasks and how frequently Plaintiffs were required to perform “off-the-clock” work. (Dkts. 88; 89). Plaintiffs' “side work” claim survived. (Id.). Plaintiffs' subsequently amended the complaint, bringing all three claims again. (Dkt. 105 (“Complaint”)).

         Plaintiffs Jeffrey Spencer, Cheyenne Williams, and Travis Hostetter are current and former employees of Macado's Lynchburg location. (Id. ¶¶ 1, 6-8). They receive both an hourly wage and tips. (Id. ¶¶ 6-8). Macado's pays / paid Plaintiffs as tipped employees, providing a wage below the federal minimum wage for untipped employees. (Id. ¶ 52). Plaintiffs allege that Macado's maintained a policy of staffing restaurants with fewer employees than necessary. (Id. ¶ 13). In turn, this policy of understaffing required Plaintiffs (1) to perform unrelated non-tip-producing tasks while clocked-in as tipped employees (“dual jobs”), (2) to perform related non-tip-producing tasks for more than twenty percent of their work time while clocked in as tipped employees (“side work”), and (3) to perform work “off the clock” before their scheduled shifts. (Id. ¶ 13).

         In Count One (Plaintiffs' “dual jobs” claim), Plaintiffs allege Macado's required them to perform various forms of non-tipped work unrelated to their tipped jobs as servers and bartenders. (Id. ¶ 53). Such unrelated work included “cleaning bathrooms and scrubbing toilets, cleaning kitchen staff's dishes, cleaning dishes, taking out trash, [and] scrubbing kitchen floors.” (Id.). Plaintiffs allege that they “and putative class members routinely spend one (1) to three (3) hours of each shift performing tasks entirely unrelated to their tip-producing duties.” (Id. ¶ 19).

         In Count Two (Plaintiffs' “side work” claim), Plaintiffs also allege they were required to perform various forms of non-tipped work that was related to their tipped jobs. (Id. ¶ 61). Such related work included “refilling sugar caddies, salt and pepper shakers, ice, and condiments, cleaning chairs, tables, booths, and performing pre-closing cleaning tasks []such as vacuuming and/or sweeping the server's assigned area and checking dishes, napkins, and utensils, cleaning the bar, wiping down bottles, restocking beer, cleaning taps and bar, cleaning bar area tables, and washing bar glasses[.]” (Id.). Plaintiffs were allegedly required to engage in these tasks for one to three hours per shift, “in excess of 20% of [Plaintiffs'] work time.” (Id. ¶¶ 35, 61, 63).

         In Count Three (Plaintiffs' “off-the-clock” claim), Plaintiffs allege they were required to perform “off the clock” work such as “helping other tipped employees deliver food to their customers, filling cups of toothpicks for the cooks to use in cooking/food preparation, washing dishes, cleaning the dining area, and helping . . . with food preparation.” (Id. at ¶ 68). This work occurred “before and/or after [Plaintiffs'] regularly scheduled shifts, ” “at least one (1) to two (2) hours per week.” (Id. ¶ 34).

         In the present motion to dismiss, Macado's seeks to dismiss only Counts One and Two under Rule 12(b)(6).

         B. Relevant FLSA Provisions and DOL Regulations

         The Court first provides an overview of FLSA's minimum wage provisions and the various regulatory sources of Plaintiffs' “dual jobs” and “side work” claims. FLSA sets the current federal minimum wage at $7.25 an hour. 29 U.S.C. § 206(a)(1)(C). However, if an employee receives tips, their employer may pay them an hourly wage below the minimum wage:

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 ...

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