Mangahas v. Eight Oranges Inc.

Background

Jessy Mangahas and Pitchaya Wohlfahrt sued Eight Oranges Inc., Chibaola, Inc., Joanne Hong Bao, and Richard Lam under the Fair Labor Standards Act and New York Labor Law. The plaintiffs alleged that The Bao and Uluh, two restaurants operated by the defendants, used common employment practices that violated wage laws. The alleged practices included failing to pay minimum and overtime wages, improperly taking tip credits, including tip-ineligible workers in tip pools, requiring substantial non-tipped work, charging workers for uniforms, making improper break deductions, failing to pay spread-of-hours compensation, and providing inadequate wage notices and wage statements.

The plaintiffs sought certification under Federal Rule of Civil Procedure 23 of a class consisting of servers, runners, bussers, bartenders, and barbacks who worked or had worked at The Bao or Uluh after October 5, 2015. They also asked the court to appoint Mangahas and Wohlfahrt as class representatives, appoint Fitapelli & Schaffer, LLP as class counsel, authorize notice to class members, and order the defendants to produce a class list.

Class Certification

The court held that the proposed class met Rule 23's requirements. The plaintiffs identified 129 potential class members: 50 who worked at The Bao, 65 who worked at Uluh, and 14 who worked at both restaurants. The court found that joining all potential class members in separate lawsuits would be impracticable, particularly given the workers' limited financial resources, the possibility of retaliation, and the efficiency of resolving common issues in one case.

The court also found commonality because evidence showed that the restaurants operated through a connected system. The restaurants shared a central management office, owner and senior manager, bookkeeper, employment records, wage-notice forms, hiring procedures, and paystubs. The court concluded that common questions included whether the defendants used a common tip-pooling policy, whether tip-ineligible workers received tips, whether wage notices and statements complied with the law, and whether workers were properly paid minimum wage, overtime, uniform costs, and spread-of-hours compensation.

The court found the named plaintiffs' claims typical because their alleged injuries arose from the same employment policies and course of conduct as the proposed class's claims. Differences in job duties, work locations, employment periods, hours, and damages did not defeat typicality. The court also found adequate representation because Mangahas and Wohlfahrt had no conflict with the class, had actively participated in the case, and were represented by qualified counsel. Their individual retaliation claims did not prevent them from representing the class.

The court rejected the defendants' argument that the class was not ascertainable. It held that membership could be determined using objective criteria: whether a person was paid tips, worked at The Bao or Uluh after October 5, 2015, and worked as a server, runner, busser, bartender, or barback.

The court further held that common questions predominated over individual questions under Rule 23(b)(3). The alleged common tip-pooling and wage policies formed the core of the case, while individualized damages calculations did not defeat predominance. The court also found that a class action was superior because individual wage claims might be too small to justify separate litigation and some workers might fear retaliation.

Class Counsel and Notice

The court appointed Fitapelli & Schaffer, LLP as class counsel. It relied on the firm's experience in wage-and-hour class actions, its work investigating and litigating this case, and its stated willingness to devote resources to continued representation.

The court approved the proposed class notice. Notice could be distributed through the same methods previously authorized for the federal wage-law collective action, as well as by posting it in conspicuous locations at the restaurants.

Class List Request

The plaintiffs also sought an order requiring the defendants to produce names, addresses, email addresses, telephone numbers, employment dates, and job titles for potential class members. The court denied that request without prejudice. The plaintiffs had not identified a reason to believe that the defendants' earlier production under prior court orders was deficient or shown that additional discovery was warranted. The court allowed the request to be renewed if the plaintiffs could show that the defendants had not complied with an earlier order or that discovery was otherwise necessary.

Disposition

The court granted the motion for certification of the class, appointment of Mangahas and Wohlfahrt as class representatives, appointment of Fitapelli & Schaffer, LLP as class counsel, and authorization of the proposed notice. The court denied without prejudice the motion for an order directing the defendants to produce a class list. This order addressed class-management requirements and did not decide whether the defendants were liable for the alleged wage violations.