Fallon v. 18 Greenwich Avenue, LLC

Background

Six named plaintiffs sued 18 Greenwich Avenue, LLC, doing business as Rosemary’s, and several individual defendants. They described themselves as former restaurant employees who worked as bartenders, barbacks, busboys, waiters, delivery workers, and food runners at different times between September 2013 and September 2019. They brought proposed collective-action claims under the Fair Labor Standards Act (FLSA) and claims under the New York Labor Law (NYLL).

The plaintiffs alleged that they were not fully paid for all hours worked, were paid less than the minimum wage, worked overtime without proper overtime pay, performed more than 20 percent of their workday on non-tipped tasks while treated as tipped employees, and had $2.50 deducted from each shift for meals they did not eat or breaks they did not take. They also alleged that defendants failed to provide accurate wage statements, required wage and overtime notices, and notices of pay rates; required them to buy work-related tools; failed to record tips accurately; and took portions of charges represented as gratuities.

Defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6). That rule tests whether a complaint alleges enough facts to state a legally plausible claim, while generally treating the complaint’s factual allegations as true for purposes of the motion.

Court’s Analysis

Group pleading. Defendants argued that the complaint improperly grouped the defendants together and should be dismissed entirely. The court rejected that argument. It explained that, in wage cases, group-pleading concerns are especially relevant to whether each individual defendant qualifies as an “employer.” The plaintiffs had made separate allegations about each individual defendant, even though those allegations were boilerplate. The court therefore declined to dismiss the complaint on group-pleading grounds.

Individual defendants as FLSA employers. The court held that the plaintiffs had not plausibly alleged that the individual defendants were employers under the FLSA. The complaint repeated the four parts of the economic-reality test—power to hire and fire, control over schedules or working conditions, control over pay, and maintenance of employment records—but did not provide specific facts showing how any individual defendant managed the restaurant or controlled the plaintiffs’ work. The court therefore dismissed the FLSA claims against the individual defendants without prejudice.

Overtime claims. The court held that the plaintiffs other than Duque Fallon plausibly stated FLSA overtime claims. Their allegations included approximate work periods, daily hours, weekly totals, and specific weeks in which they allegedly worked more than 40 hours without receiving proper overtime pay. The court explained that estimates can be sufficient at the pleading stage when they identify facts supporting an inference of an overtime violation.

The court dismissed Duque Fallon’s FLSA overtime claim without prejudice because his alleged weekly hours—35 to 36, 36 to 37, and 20 to 30 hours during the periods described—did not include a single week over 40 hours. A workweek exceeding 40 hours is required for an FLSA overtime claim.

Edgar Rolando Gutierrez Lopez’s claims. The court held that Gutierrez’s FLSA claims were time-barred. He allegedly stopped working at Rosemary’s on September 15, 2016, while the action began on October 16, 2019. The court concluded that the claims were untimely even under the FLSA’s three-year period for willful violations and dismissed them with prejudice.

The court nevertheless exercised supplemental jurisdiction, meaning authority to hear related state-law claims, over Gutierrez’s NYLL claims. Those claims arose from the same compensation practices and shared evidence with the other plaintiffs’ FLSA claims. The court concluded that keeping the related claims together served judicial efficiency and that none of the statutory reasons for declining supplemental jurisdiction applied.

Leave to Amend and Disposition

The court granted plaintiffs leave to file a second amended complaint to address the identified pleading deficiencies. It found that amendment might not be futile, except regarding Gutierrez’s FLSA claims. The second amended complaint was due by April 7, 2021. The court warned that it might be reluctant to allow another amendment if defendants successfully challenged the second amended complaint.

The court’s final dispositions were:

- The motion was denied to the extent defendants sought dismissal based on group pleading. - The motion was granted as to the FLSA claims against the individual defendants, and those claims were dismissed without prejudice. - The motion was granted in part and denied in part as to the FLSA overtime claims: the claims of plaintiffs other than Duque Fallon could proceed, while Duque Fallon’s claim was dismissed without prejudice. - The motion was granted as to Gutierrez’s FLSA claims, which were dismissed with prejudice. - Gutierrez’s NYLL claims remained in the case.

The opinion states that the motion to dismiss was granted in part and denied in part. The supplied case information identifies Barbara Moses as the judge, but the opinion identifies and is signed by Mary Kay Vyskocil; this summary uses the judge named in the opinion.