Santos de Oliveira v. Scores Holding Company Inc.

Background

Luisa Satos De Oliveira sued Club Azure LLC, which did business as Scores NY, under the Fair Labor Standards Act (FLSA) and New York Labor Law. She worked as a cocktail waitress from October 20, 2017, through March 19, 2018. The club paid her a cash wage below the applicable minimum wage and used a tip credit, while the opinion states that her earnings after tips were approximately $57.82 per hour in 2017 and $60.59 per hour in 2018.

Her claims concerned minimum wages, overtime wages, spread-of-hours wages, wage notices, wage statements, equipment costs, and tips. She originally brought the case as a class action and named additional defendants, but she did not seek class certification and voluntarily dismissed Scores Holding Company Inc., Robert Gans, Mark S. Yackow, and Howard Rosenbluth. The opinion states that she conceded the club did not misappropriate her tips and did not oppose summary judgment on the equipment-cost and tip claims.

After discovery, Club Azure moved for summary judgment, and De Oliveira cross-moved for summary judgment on the claims she continued to pursue. Summary judgment is a decision without a trial when the court determines that no genuine dispute of important fact requires a jury’s decision.

Rulings

The court held that the club could treat De Oliveira as a tipped employee, but New York law required written notice of the club’s intention to claim a tip credit. The club admittedly did not provide that written notice. The court therefore granted De Oliveira’s motion to the extent it established the club’s liability for the New York wage-notification violation. The court noted that the parties disputed whether the club provided adequate notice under the FLSA, but found that dispute unnecessary to resolve because an employee cannot recover twice for the same unpaid wages under the FLSA and New York law. The FLSA claim was therefore moot.

The court rejected De Oliveira’s claim concerning the New York Wage Theft Prevention Act’s hiring notice. Although the club did not provide the required notice at hiring, the court found that the club timely paid her well above the statutory minimum wage. The court held that this supplied an exception to liability and granted the club’s motion on that claim, identified as count 6.

The court also granted the club’s motion on the accurate-wage-statement claim, identified as count 7. The pay stubs listed the rate and basis of pay, including the tip-credit information required by New York law, so the court held that the club met its obligation.

The court granted De Oliveira’s motion on overtime pay. She worked 41.5 hours during one workweek and received $15.15 per hour for the additional 1.5 hours. Because the applicable regular rate was $13.00 per hour, the required overtime rate was $19.50 per hour. The club therefore owed the difference between $15.15 and $19.50 for 1.5 hours.

The court also granted De Oliveira’s motion on spread-of-hours pay. She worked approximately 10.1 hours on December 2, 2017, and the club did not pay the additional hour’s pay required when an employee’s workday exceeds ten hours. The court held the club liable for the missing spread-of-hours wages.

Finally, the court held that the club was liable for liquidated damages at least for the unpaid overtime and failure to comply with the New York notice requirement. Liquidated damages are an additional amount equal to certain unpaid wages. The club argued that it acted in good faith because a human-resources manager incorrectly advised that written notice was no longer required. The court found that relying on that advice, without taking steps to confirm the law, did not meet the employer’s demanding burden to prove good faith.

Disposition

The conclusion states that De Oliveira’s motion was granted to the extent that Club Azure was liable for inadequate wage notification, unpaid overtime wages, and unpaid spread-of-hours wages. Club Azure’s motion was granted to the extent that the hiring-notice and accurate-wage-statement claims were dismissed. The court stated that no triable claims remained and directed the Clerk of Court to close the motion.