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Gallardo v. Los Portales Bolivar, LLC

United States District Court, W.D. Tennessee, Eastern Division

March 7, 2017

CESAR GALLARDO, individuals on behalf of himself and others similarly situated, Plaintiff,
v.
LOS PORTALES BOLIVAR LLC, LOS PORTALES HENDERSON LLC, TOMAS LEON, and ROY SALVADOR, Defendants.

          ORDER GRANTING IN PART, DENYING IN PART PLAINTIFF'S MOTION FOR CONDITIONAL CERTIFICATION AND ADOPTING IN PART MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

          S. THOMAS ANDERSON UNITED STATES DISTRICT JUDGE

         Before the Court is Plaintiff Cesar Gallardo's Motion for Conditional Certification (ECF No. 6) filed on April 4, 2016. The Court referred Plaintiff's Motion to the United States Magistrate Judge for report and recommendation, and the Magistrate Judge issued his report on February 1, 2017. Defendants Los Portales Bolivar, LLC; Los Portales Henderson, LLC; Tomas Leon; and Roy Salvador have filed timely objections to the Magistrate Judge's report (ECF No. 51), and Plaintiff has filed a response to Defendants' objections. For the reasons set forth below, the Magistrate Judge's Report and Recommendation is ADOPTED in part, and the Motion for Conditional Certification is GRANTED in part, DENIED in part.

         BACKGROUND

         On March 17, 2016, Plaintiff filed a Complaint on behalf of himself and those similarly situated, alleging violations of the Fair Labor Standards Act (“FLSA”). The Complaint named as Defendants two business entities, Los Portales Bolivar, LLC and Los Portales Henderson, LLC (“the LLC Defendants”), and two individuals, Tomas Leon and Roy Salvador. The Magistrate Judge has reported the following background facts to which neither party has objected and which the Court hereby adopts. The Magistrate Judge relied on an affidavit furnished by Plaintiff and attached as an exhibit to the Motion for Conditional Certification.

         Plaintiff worked for Defendant[1] at restaurants located in Bolivar and Henderson between 2014 and approximately February 12, 2016. Plaintiff worked at the cash register, as a server, and in “other jobs.” Plaintiff had previously worked for Defendant in 2012 at restaurants in Jackson, Dyersburg, and Martin. During the relevant time period, Plaintiff regularly worked over forty hours per week. Plaintiff alleges that Defendant did not pay him for all the hours he worked, intentionally depriving him of minimum wage and overtime compensation. Defendant would give Plaintiff a paycheck for less than the amount he was owed and then require Plaintiff to endorse the check back to Defendant at which point they would give Plaintiff cash in an amount less than his paycheck. According to Plaintiff, he has spoken with former co-workers at many of the different Los Portales locations, and they have experienced the same problem of not being compensated for all hours worked. In addition to his own affidavit, Plaintiff also submitted the affidavit of other former employees at other Los Portales restaurants and the declaration of Anthony Martinez who testified that he was subject to the same illegal pay practices at Patio Grill and Los Portales Union City.

         In the Motion for Conditional Class Certification, Plaintiff requests that the Court (1) authorize the case to proceed as a collective action for overtime violations under the FLSA on behalf of non-exempt employees who worked for Defendants, who were subject to Defendants' practices of failing to pay proper overtime wages and minimum wage pursuant to the FLSA during the last three years; (2) issue an order directing Defendants to immediately provide a list of the names, last known addresses, and last known telephone numbers for all putative class members within the last three years; and (3) issue an order that notice be prominently posted at Defendants' facilities where putative class members work, attached to current employees' next scheduled paycheck, and be mailed to the employees so that they can assert their claims on a timely basis as part of this litigation; and (4) order that the opt-in plaintiffs Consent Forms be deemed “filed” on the date they are postmarked. Defendants oppose the Motion for Conditional Certification.

         The Magistrate Judge has recommended that the Court grant Plaintiff's Motion. The Magistrate Judge opined that through the allegations of the Complaint and the other affidavits filed with the Motion for Conditional Certification, Plaintiff has carried his light burden at this stage of the case to show that he was similarly situated to the potential opt-in plaintiffs. The Magistrate Judge attached more weight to Plaintiff's own affidavit and his allegations about Defendants' payroll policies, though the Magistrate Judge noted that proof of Defendants' practices at other restaurants also tended to support Plaintiff's claims. The Magistrate Judge concluded that conditional certification at this early stage of the case was proper. The Magistrate Judge went on to reject Defendants' arguments that the Court should stay any collective action pending the outcome of the Department of Labor's investigation into Plaintiff's claims.[2] The Magistrate Judge also reasoned that the proposed class need not be limited to the restaurants where Plaintiff was employed during the relevant time period. According to the Magistrate Judge's report, Plaintiff's proof had shown that Defendants' alleged violations of the FLSA extended beyond the locations where Plaintiff worked. Plaintiff had adduced further evidence that the restaurants “constitute a single enterprise, ” making conditional certification “as to all of the restaurants named” proper.[3]

         Defendants have raised three discrete objections to the Magistrate Judge's recommended disposition of the Motion for Conditional Certification. First, Defendants argue that Plaintiff has not shown how he is similarly situated to the putative class insofar as Plaintiff seeks to represent employees of Los Portales restaurants where Plaintiff himself was not employed. The affidavits filed with Plaintiff's Motion refer to Los Portales restaurants in several other cities and even restaurants with names other than Los Portales. However, none of the evidence shows that Defendants Tomas Leon or Roy Salvador or the LLC Defendants were “employers” at these additional restaurants. Defendants contend then that Plaintiff has offered no proof to show that any named Defendant is the “employer” for FLSA purposes of any hourly worker employed at the Los Portales restaurants in locations other than Bolivar or Henderson.

         Second and relatedly, Defendants object to the Magistrate Judge's determination that each Los Portales restaurant, including but not limited to the Los Portales restaurants in Bolivar and Henderson, constitute a single enterprise. Defendants' objections are imprecise on this point. The Court understands Defendants' argument to be that the Magistrate Judge improperly accepted allegations about payroll practices at Los Portales restaurants other than the Los Portales locations in Bolivar and Henderson and deemed all of the Los Portales restaurants to be a single enterprise but without any proof to support such a conclusion. Defendants argue that an “employer” is not the same as a “enterprise, ” as the FLSA defines the terms. And Plaintiff adduced no proof to show that the Los Portales restaurants constitute a “single integrated enterprise” as the Sixth Circuit has defined the doctrine. In its essence, Defendants' objection is that Plaintiff's Complaint names only two Los Portales corporate entities, Los Portales Bolivar, LLC and Los Portales, Henderson, LLC, but now seeks conditional certification of a class of employees from as many as eleven Los Portales restaurants as well as other restaurants. Plaintiff has not properly joined any additional parties or otherwise established that the Court has jurisdiction over any party not named in the pleadings in accord with due process. As such, Defendants argue that the scope of the putative class, which would include employees from Los Portales restaurants besides the locations in Bolivar and Henderson, is overly broad.

         Finally, Defendants object that the Magistrate Judge improperly assumed that Defendants Tomas Leon and Roy Salvador are “employers” as the FLSA defines the term or that Leon and Salvador in their individual capacities can be liable to Plaintiff. Defendants assert that neither Leon nor Salvador exercised operational control over the Defendant restaurants and did not exercise managerial control over Plaintiff. Leon and Salvador did not participate in the day-today operations of the Los Portales restaurants in Bolivar or Henderson. Without proof to establish that Leon or Salvador were involved in decisions about how Plaintiff and others were managed or paid, Plaintiff cannot hold them liable for violations of the FLSA.

         Plaintiff has responded to Defendants' objections. Plaintiff states that the Magistrate Judge correctly recommended conditional certification for a putative class of “all hourly employees of Defendants who work at any of the locations owned and operated by Defendants.”[4]According to Plaintiff's brief, Leon and Salvador “operate a number of Mexican restaurants in the West Tennessee area, ” though Plaintiff only cites a Los Portales website stating Tomas Leon found the first Los Portales in Jackson in 1990 and now owns with his brothers sixteen restaurants in Tennessee, Missouri, Kentucky, and Louisiana. Plaintiff cites no other record evidence to show which of Leon's restaurants fall within the scope of the putative class. Plaintiff argues that he has provided more than enough proof to satisfy his burden for conditional certification at this stage of the case. With respect to Defendants' arguments about the declarations attached to the Motion for Conditional Certification, Plaintiff clarifies that not all of the declarants seek to opt-in to this collective action. Plaintiff concedes that three of the declarants previously brought FLSA claims against the same Defendants and that these declarants no longer have any viable FLSA claim against Defendants. Plaintiff explains that their proof only offers additional corroboration for Plaintiff's claims. Plaintiff further argues that Defendants have raised their argument that Leon and Salvador are not “employers” for purposes of the FLSA for the first time in their objections to the Magistrate Judge's report. As such, Defendants have waived the issue. For these reasons Plaintiff asks the Court to adopt the Magistrate Judge's recommendation and overrule Defendants' objections.

         STANDARD OF REVIEW

         Pursuant to 28 U.S.C. § 636, the Magistrate Judge may issue a report and recommendation for any dispositive motion.[5] The Court must “make a de novo determination of those portions of the report or specific proposed findings or recommendations to which objection is made.”[6] After reviewing the evidence, the Court is free to accept, reject, or modify the proposed findings or recommendations of the Magistrate Judge.[7] The Court need not review, under a de novo or any other standard, those aspects of the report and recommendation to which no specific objection is made.[8] Rather, the Court may simply adopt the findings and rulings of the Magistrate Judge to which no specific objection is filed.[9]

         ANALYSIS

         Defendants have not objected to the Magistrate Judge's discussion of relevant law on the conditional certification of an FLSA collective action. Section 216(b) of the FLSA provides as follows:

An Action [under ยง 206] may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees for and on behalf of himself or themselves and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to ...

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