Georges v. Detroit Pizza NYC LLC

Background

Marvin Georges and Jerel Pool sued Detroit Pizza NYC LLC, Detroit Pizza Ventures LLC, Detroit Pizza LLC, Detroit Pizza East LLC, and Scott Steven Gregerson. The amended complaint alleges that Defendants operated as a single integrated enterprise that centrally controlled labor relations at a nationally operating chain of thirty fast-food restaurants doing business under the name Jet’s Pizza.

Georges allegedly worked for Defendants at a Jet’s Pizza location in New York City from around August 15, 2023, until Defendants terminated his employment on November 15, 2023. Pool allegedly worked there from around August 13, 2023, until October 6, 2023.

The plaintiffs allege violations of the Fair Labor Standards Act (FLSA), New York Labor Law, and New York City’s Fair Workweek Law. Their allegations include failure to pay for all hours worked; failure to pay overtime at one and one-half times the regular rate; illegal retention or misappropriation of tips; inaccurate wage statements; and multiple violations concerning work schedules, schedule changes, short turnaround between shifts, available shifts, and reductions in hours. Georges also alleges retaliation under the FLSA and New York Labor Law after complaining about labor-law violations.

The plaintiffs brought the action as a collective action under the FLSA and a class action under Federal Rule of Civil Procedure 23. Defendants moved under Rule 12(b)(6), which permits dismissal for failure to state a legally sufficient claim.

Issue

Defendants argued that the amended complaint failed to allege either “enterprise coverage” or “individual coverage” under the FLSA. The FLSA’s overtime requirement applies when an employee works in interstate commerce or works for an enterprise engaged in interstate commerce.

Court’s reasoning

The court ruled that the plaintiffs plausibly alleged enterprise coverage. Under the FLSA, an enterprise is covered when it has employees handling goods or materials that moved in interstate commerce and has at least $500,000 in annual gross sales or business. The court explained that this requirement is generally not difficult to plead and can be met even when the business operates locally.

The amended complaint alleged that each corporate Defendant was part of a chain with thirty or more establishments nationally, that the operations were interrelated and unified, and that each corporate Defendant had annual sales exceeding $500,000. It also alleged that employees handled specific goods and supplies that were produced outside New York, including Pepsi-Cola beverages, mozzarella cheese, butter, flour, tomato sauce, tomatoes, chickens, pepperoni, bacon, salami, mushrooms, peppers, onions, olives, lettuce, paper towels, cleaning products, and other supplies.

The court rejected Defendants’ argument that the plaintiffs had to identify the exact origin of the products. At the pleading stage, the allegations only had to make it plausible that the goods used by the restaurants traveled across state lines. The court concluded that the plaintiffs met that standard.

Disposition

The court denied Defendants’ motion to dismiss the amended complaint. The Clerk of Court was directed to close the motion on the docket. Because this was a motion to dismiss for failure to state a claim, the court decided only that the amended complaint adequately pleaded the claims at this stage; it did not determine whether the allegations would ultimately be proven.