Gonzalez v. Hanover Ventures Marketplace LLC

Background

Denny Gonzalez brought a proposed collective and class action against Hanover Ventures Marketplace LLC, doing business as Le District, John Doe Company 1, doing business as HPH Hospitality, and Paul Lamas, Peter Poulakakos, Nicolas Abello, and David Coucke. He asserted claims under the Fair Labor Standards Act (FLSA), New York Labor Law, Title VII, New York Executive Law § 296, the New York City Administrative Code, and New York common law.

Gonzalez worked as a server and waiter at L’Appart, a restaurant at Le District, from February 2018 through December 2019. He alleged that he and other employees were subjected to common wage practices, including an invalid tip credit, unpaid overtime, time shaving, deductions for meal breaks that they often worked through, improper retention or reduction of tips, and failure to provide required wage notices and statements. He also alleged that the restaurants and related entities operated as a single integrated enterprise, with shared employees, payroll, human-resources functions, management, marketing, and other operations.

Motion and legal standard

Gonzalez asked the court to conditionally certify an FLSA collective action, approve proposed notice and consent forms, allow distribution and workplace posting of the notices, require Defendants to provide contact information for potentially eligible employees, and toll the FLSA limitations period until notice could be sent.

At the first, or notice, stage of an FLSA collective action, a plaintiff must make a modest factual showing that the plaintiff and potential participants were victims of a common policy or plan that violated the law. The court does not decide factual disputes, determine the ultimate merits, or make credibility findings at this stage. A later review after discovery can determine whether participating employees are actually similarly situated and whether the collective should be decertified.

Court’s analysis

The court concluded that Gonzalez had adequately alleged, for this stage, that Le District operated as a single integrated enterprise for potential FLSA liability. The court relied on allegations and supporting materials concerning common ownership or control, shared operations, a common website and marketing, shared employees and storage, common payroll and human-resources systems, and common management practices.

The court also found that Gonzalez met the modest burden for conditional certification. In a supporting declaration, he identified six coworkers by position and employer entity and described conversations and observations concerning similar non-tipped work, inadequate gratuities from large events, automatic meal-break deductions, manager participation in tip pools, and missing wage notices. The court treated Defendants’ contrary assertions about separate staff and payroll as disputes relevant to the merits, not a basis to deny conditional certification.

The court rejected Defendants’ argument that Gonzalez’s individual discrimination claims and alleged disciplinary termination created an unresolvable conflict with the proposed FLSA collective. It held that those individual claims were irrelevant to whether Gonzalez and the proposed participants shared a material legal or factual issue concerning their wage claims.

Scope and notice

The court limited the proposed collective to current and former non-exempt employees employed by Hanover at Le District during the three years before the complaint was filed. It found a three-year notice period appropriate because the FLSA generally allows two years for claims, or three years for willful violations, and Gonzalez had not yet moved to certify the New York Labor Law claim, which he said carried a longer limitations period.

The court found the proposed notice and consent forms generally fair and accurate but required Gonzalez to revise them to reflect the three-year period. The notice could be posted at Defendants’ places of business during regular business hours. The court did not require production of Social Security numbers because of privacy concerns. Defendants were directed to provide the approved relevant contact information in their possession, with the parties to meet and confer about the production schedule.

The court approved equitable tolling of the FLSA limitations period beginning on the date Gonzalez filed the motion and continuing until he could send notice to potential opt-in plaintiffs. Equitable tolling preserves the limitations period in unusual circumstances; here, the court relied on the delay in deciding the motion and the possibility that potential participants could otherwise lose claims through no fault of their own.

Disposition

The court granted Gonzalez’s motion for conditional certification for the defined three-year collective. The proposed notice and consent forms could be distributed by posting at Defendants’ workplaces after the required change. The court also approved equitable tolling until Gonzalez could send notice to potential opt-in plaintiffs. The order did not decide the ultimate merits of the FLSA claims, and the court noted that Defendants could later seek decertification if discovery showed that participating employees were not similarly situated.