United States District Court, S.D. Florida
Stephane R. Shehata and Michael A. Olson, Plaintiffs,
Sobe Miami, LLC, dba Palace Bar, and Thomas J. Donall, Defendants.
ORDER DENYING MOTION FOR SUMMARY JUDGMENT
N. Scola, Jr. United States District Judge
R. Shehata and Michael A. Olson both worked as servers at
Palace Bar in Miami Beach, Florida. They have sued Defendants
Sobe Miami, LLC, doing business as Palace Bar, and Thomas J.
Donall, the owner of the bar (collectively “Palace
Bar”), for minimum-wage and overtime payment violations
under the Fair Labor Standards Act. Palace Bar claims
entitlement to summary judgment on the Plaintiffs'
overtime claims because the Plaintiffs are exempt employees
under the FLSA. Defendant Donall also contends he cannot be
held individually liable for any FLSA violations because he
was not an “employer” as defined by the FLSA. The
Plaintiffs counter that genuine issues of material fact
preclude summary judgment on either basis. After a thorough
review of the record, the Court agrees with the Plaintiffs
and therefore denies Palace Bar's motion for summary
judgment (ECF No. 24).
worked as a server at Palace Bar from December 31, 2015
through May 20, 2017. (Pls.' Resp. ¶ 2, ECF No. 28,
1.) Shehata was also a server, within that same timeframe,
from February 16, 2016 through January 24, 2017.
(Id. at ¶ 1.) Donall owns the Palace Bar but
the parties dispute the level of his involvement with the
operation of the bar. (E.g., id. at
¶¶ 4-5, 9.) The Palace Bar's general
manager's responsibilities included managing its servers,
bussers, food runners, and “housemen”: hiring and
firing them; determining their pay; setting their schedules;
and generally supervising them. (Id. at ¶ 6.)
All servers at the bar were paid an hourly wage plus
three-quarters of a 20% charge that is added to every
customer's bill. (Id. at ¶ 10.) The parties
dispute whether this charge was mandatory or merely a
suggestion. (Id. at ¶ 16-18.) In addition,
servers kept any tips that customers might decide to leave on
top of the 20% charge. (Id. at ¶¶ 11, 19.)
The remaining quarter of the 20% charge was divided among
various other Palace Bar employees: one-fifth each to the
host, the food runner, and the bartender; and the remaining
two-fifths to the manager and the housemen (with the manager
getting one-third and the housemen splitting the other
two-thirds). (Id. at ¶¶ 21-23.)
minimum wage in 2016 was $8.05 an hour. (Id. at
¶ 12.) The corresponding applicable cash wage for tipped
employees in 2016 was $5.03 an hour. (Id.) In 2017
the minimum wage was $8.10 an hour and the corresponding
applicable cash wage was $5.08 an hour. (Id. at
¶ 13.) Palace Bar paid both the Plaintiffs the minimum
applicable cash wage for tipped employees for their regular
hourly wages, plus their share of the 20% charge as well as
any gratuity on top of that charge. (Id. at
¶¶ 12-13, 23-24.) Both the additional gratuity as
well as the server's portion of the 20% charge were
recorded on each server's pay stub as either
“Reported Tips” or “Credit Card
Tips.” (Id. at ¶ 26.) Both of the
Plaintiffs worked overtime hours from time to time.
(Id. at ¶¶ 54, 92.) Their hourly wages
combined with their additional pay amounts always amounted to
at least one-and-a-half times the minimum wage for those
overtime hours (anywhere between $15 to $52 an hour).
judgment is proper if following discovery, the pleadings,
depositions, answers to interrogatories, affidavits and
admissions on file show that there is no genuine issue as to
any material fact and that the moving party is entitled to
judgment as a matter of law. Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986); Fed.R.Civ.P. 56.
“An issue of fact is ‘material' if, under the
applicable substantive law, it might affect the outcome of
the case.” Hickson Corp. v. N. Crossarm Co.,
357 F.3d 1256, 1259-60 (11th Cir.2004). “An issue of
fact is ‘genuine' if the record taken as a whole
could lead a rational trier of fact to find for the nonmoving
party.” Id. at 1260. All the evidence and
factual inferences reasonably drawn from the evidence must be
viewed in the light most favorable to the nonmoving party.
Adickes v. S.H. Kress & Co., 398 U.S. 144, 157
(1970); Jackson v. BellSouth Telecomms., 372 F.3d
1250, 1280 (11th Cir. 2004).
party properly makes a summary judgment motion by
demonstrating the absence of a genuine issue of material
fact, whether or not accompanied by affidavits, the nonmoving
party must go beyond the pleadings through the use of
affidavits, depositions, answers to interrogatories,
admissions on file and other documents, and designate
specific facts showing that there is a genuine issue for
trial. Celotex, 477 U.S. at 323-24. The
nonmovant's evidence must be significantly probative to
support the claims. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 249 (1986). The Court will not weigh the
evidence or make findings of fact. Anderson, 477
U.S. at 249; Morrison v. Amway Corp., 323 F.3d 920,
924 (11th Cir. 2003). Rather, the Court's role is limited
to deciding whether there is sufficient evidence upon which a
reasonable juror could find for the nonmoving party.
Id. “If more than one inference could be
construed from the facts by a reasonable fact finder, and
that inference introduces a genuine issue of material fact,
then the district court should not grant summary
judgment.” Bannum, Inc. v. City of Fort
Lauderdale, 901 F.2d 989, 996 (11th Cir. 1990).
Bar argues it is entitled to summary judgment on the
Plaintiffs' overtime claims because the Plaintiffs
received commissions as part of their compensation and are
therefore exempt from the FLSA's overtime requirements.
Palace Bar, in its motion, does not expressly seek summary
judgment on the Plaintiffs' minimum wage claims, but only
obliquely incorporates these claims in some of their
arguments. Donall also seeks summary judgment with respect to
both claims against him, claiming that although he owns the
bar, he was not the Plaintiffs' “employer” as
defined under the FLSA.
The Plaintiffs have presented genuine issues of material fact
regarding Palace Bar's claim that they are exempt
employees under the FLSA.
Bar insists the Plaintiffs were commissioned employees and
therefore it was not required to comply with the FLSA's
overtime wage provisions. As set forth by Palace Bar, under
the FLSA, this exemption is applied when three requirements
are met: (1) the employee's regular rate of pay exceeds
one and one-half times the minimum applicable hourly rate in
a workweek in which overtime hours are worked; (2) more than
half of the employee's compensation for a representative
period (not less than one month) must represents commissions
on goods or services; and (3) the employee must work in a
“retail or service establishment.” (Def.'s
Mot. at 5 (citing 29 U.S.C. § 207(i) (the “§
7(i) exemption”)).) At the center of the parties'
dispute, with respect to the exemption, is whether the charge
that was added to customers' bills constitutes a
“commission” for purposes of the § 7(i)
Bar maintains that the 20% service charge added to every
customer's bill qualifies as a commission, and not a
gratuity, for the purposes of applying the § 7(i)
exemption. The FLSA does not itself define either
“gratuity” or “commission.” Its
implementing rules, however, as Palace Bar points out, offer
A tip is a sum presented by a customer as a gift or gratuity
in recognition of some service performed for him. It is to be
distinguished from payment of a charge, if any, made for the
service. Whether a tip is to be given, and its amount, are
matters determined solely by the customer, who ...