UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA. Plaintiffs, COLLECTIVE AND CLASS ACTION COMPLAINT v. (JURY TRIAL DEMANDED)

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1 CASE 0:14-cv Document 1 Filed 05/06/14 Page 1 of 23 UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA Toni Marano and Summer Schultz, on behalf of themselves and all others similarly situated and the Proposed Minnesota Rule 23 Classes, Case No. 14-cv Plaintiffs, COLLECTIVE AND CLASS ACTION COMPLAINT v. (JURY TRIAL DEMANDED) Right Choice Lodging, LLC, d/b/a Holiday Inn on the Lake, Defendant. Plaintiffs Toni Marano and Summer Schultz ( Plaintiff Marano and Plaintiff Schultz ), on behalf of themselves and all others similarly situated, and on behalf of the members of the proposed Minnesota Rule 23 Classes, by and through their attorneys, Nichols Kaster, PLLP, bring this action against Defendant Right Choice Lodging, LLC d/b/a Holiday Inn on the Lake ( Defendant ) for damages and other relief relating to violations of the Fair Labor Standards Act and Minnesota Fair Labor Standards Act. Plaintiffs state the following as their claims against Defendant: PRELIMINARY STATEMENT 1. This case is about Defendant s illegal pay practices. 2. Specifically, Defendant: (a) failed to pay its dining room and cocktail servers the federally required minimum wage of $7.25 per hour; (b) deducted 30 minutes from its record of total hours worked by each dining room and cocktail server per day, 1

2 CASE 0:14-cv Document 1 Filed 05/06/14 Page 2 of 23 thereby resulting in servers not being paid for 30 minutes they worked and further reducing their wages below both the federal and state minimum wage; (c) failed to compensate its dining room and cocktail servers for overtime hours worked at the proper rate; and (d) required its cocktail servers to pool their gratuities with management in violation of the Minnesota Fair Labor Standards Act. 3. In light of these systematic, intentional, and illegal practices, Plaintiffs bring this proposed collective and class action against Defendant on behalf of all individuals who have worked for Defendant as dining room or cocktail servers (collectively, servers ) at any time from three years prior to the filing of this Complaint through the present. 4. This action is brought as a collective action under the Fair Labor Standards Act, 29 U.S.C. 201, et seq., ( FLSA ) for failure to pay federally mandated minimum wage and overtime compensation. 5. This action is also brought as a class action pursuant to Rule 23 of the Federal Rules of Civil Procedure for failure to pay the state mandated minimum wage compensation and for unlawful tip pooling under the Minnesota Fair Labor Standards Act, Minn. Stat , et seq. ( MFLSA ). 6. Defendant has willfully engaged in a pattern, policy, and practice of unlawful conduct for the actions alleged in this Complaint, in violation of the federal and state rights of Plaintiffs, those similarly situated, and members of the proposed Minnesota Rule 23 Classes. 2

3 CASE 0:14-cv Document 1 Filed 05/06/14 Page 3 of 23 PARTIES Plaintiffs 7. Plaintiff Toni Marano ( Plaintiff Marano ) is an adult resident of the State of North Dakota. Plaintiff worked for Defendant as a cocktail server and as a dining room server at Holiday Inn on the Lake, which is the Holiday Inn hotel Defendant owns and operates in Detroit Lakes, Minnesota. 8. Defendant employed Plaintiff Marano from approximately March 2012 to October Plaintiff Summer Schultz ( Plaintiff Schultz ) is an adult resident of the state of Minnesota. Plaintiff worked for Defendant as a dining room server at Holiday Inn on the Lake, which is the Holiday Inn hotel Defendant owns and operates in Detroit Lakes, Minnesota. 10. Defendant employed Plaintiff Schultz from approximately April 2010 to August Pursuant to 29 U.S.C. 216(b), each Plaintiff has consented in writing to be a party to the FLSA claims asserted in this action. Plaintiffs signed consent forms are attached as Exhibit A. As this case proceeds, it is likely that other individuals will file consent forms and join as opt-in plaintiffs. 12. Plaintiffs and those similarly situated are current and former employees of Defendant within the meaning of the FLSA, 29 U.S.C. 203(e)(1). 3

4 CASE 0:14-cv Document 1 Filed 05/06/14 Page 4 of Plaintiffs and the proposed Minnesota Rule 23 Classes are current and former employees of Defendant within the meaning of the MFLSA, including Minn. Stat and Minn. Stat Plaintiffs, those similarly situated, and members of the proposed Minnesota Rule 23 Classes have been employed by Defendant within the three years prior to the filing of this Complaint. Defendant 15. Defendant Right Choice Lodging, LLC ( Defendant ) is a domestic corporation with its principal place of business in Detroit Lakes, Minnesota. 16. Defendant is a franchisee of the nationwide hotel chain, Holiday Inn. 17. Defendant independently owns and operates the Holiday Inn on The Lake, located in Detroit Lakes, Minnesota. 18. Defendant employed servers, including Plaintiffs, to work at Holiday Inn on the Lake, with cocktail servers working in the bar and dining room servers working in the restaurant dining room at Holiday Inn on the Lake. 19. Defendant s gross annual sales made or business done has been $500,000 or greater per year at all relevant times. 20. Defendant s gross annual sales made or business done has been $625,000 or greater per year at all relevant times. 21. Defendant is an employer engaged in interstate commerce and/or the production of goods for commerce, within the meaning of the FLSA, 29 U.S.C. 203(d). 4

5 CASE 0:14-cv Document 1 Filed 05/06/14 Page 5 of Numerous customers travel from outside of Minnesota to Defendant s hotel, where they stay. 23. Defendant sells alcohol at its hotel, including liquor and beer imported from outside Minnesota. 24. Servers, including Plaintiffs, were expected to and did handle and serve this alcohol to customers during the time that they worked for Defendant. 25. Defendant has been an employer within the meaning of the MFLSA, including Minn. Stat and Minn. Stat , at all relevant times during the past three years. 26. Defendant has been a large employer within the meaning of the MFLSA, including Minn. Stat , at all relevant times during the past three years. JURISDICTION AND VENUE 27. This action arises under the Fair Labor Standards Act, 29 U.S.C. 201 et seq. ( FLSA ). Therefore, the Court has original jurisdiction to hear this Complaint and to adjudicate the claims stated herein pursuant to 28 U.S.C This Court also has supplemental jurisdiction, pursuant to 28 U.S.C. 1367, over Plaintiffs state law claims, as Plaintiffs state and federal claims derive from a common nucleus of operative fact. 29. Venue is proper in the United States District Court, District of Minnesota, pursuant to 28 U.S.C. 1391, because Defendant resides in this District and because all of the events giving rise to the claims occurred in this District. 5

6 CASE 0:14-cv Document 1 Filed 05/06/14 Page 6 of 23 FACTUAL ALLEGATIONS RELATED TO DEFENDANT S FAILURE TO PAY THE FEDERAL MINIMUM WAGE 30. Plaintiffs re-allege and incorporate by reference the above paragraphs as if fully set forth herein. 31. Plaintiffs, those similarly situated, and members of the proposed Minnesota Rule 23 Classes worked as dining room and/or cocktail servers for Defendant. 32. From three years prior to the filing of this Complaint through the present, Defendant paid all of its servers, including Plaintiffs, a base minimum wage rate of $6.15 per hour, the Minnesota state minimum wage for larger employers. 33. The minimum wage rate required by the FLSA has been $7.25 per hour at all times during the three years prior to the filing of this Complaint through the present. 34. Because Defendant only paid its servers, including Plaintiffs, a base minimum wage rate of $6.15, Defendant violated the FLSA s minimum wage requirements. 35. Defendant s failure to pay the FLSA minimum wage rate was willful. 36. In fact, Defendant is aware that Minnesota labor laws are different than federal labor laws. For example, Defendant is aware of the fact that federal law allows employers to take a tip credit against the minimum wage, but that Minnesota law does not. As a result of this awareness, Defendant has not taken a tip credit against the minimum wage in Minnesota. 37. Defendant also cannot avail itself of the federal tipped minimum wage rate because Defendant has not and does not provide notice to its employees of its intention to 6

7 CASE 0:14-cv Document 1 Filed 05/06/14 Page 7 of 23 take a tip credit. 38. From approximately mid-2013 to the present, Defendant has also required its cocktail servers to pool tips with management, which further prevents Defendant from legally being allowed to avail itself of the federal tipped minimum wage rate. FACTUAL ALLEGATIONS RELATED TO DEFENDANT S AUTOMATIC TIME AND PAY DEDUCTION POLICY AND CONSEQUENT FAILURE TO PAY THE FEDERAL AND MINNESOTA MINIMUM WAGE 39. Plaintiffs re-allege and incorporate by reference the above paragraphs as if fully set forth herein. 40. Defendant further violated the FLSA s minimum wage requirement and the MFLSA s minimum wage requirement by deducting 30 minutes of time from its servers recorded hours worked. 41. To explain, Defendant required its servers, including Plaintiffs, to clock in to Defendant s electronic timekeeping system when they started a shift and to clock out of Defendant s electronic timekeeping system when they ended a shift. 42. Defendant did not require servers to, nor did its time-keeping system provide servers the option to, clock out for a meal break. 43. In fact, Defendant s restaurant and bar were so busy that servers, including Plaintiffs, were required to work straight through their shifts without taking a meal break. 44. Despite this, Defendant would deduct 30 minutes from its record of total hours worked by each server per day, purportedly to account for a meal break. 7

8 CASE 0:14-cv Document 1 Filed 05/06/14 Page 8 of Thus, Defendant s systematic deduction of 30 minutes of time from its servers recorded hours resulted in servers not being paid for all hours worked; specifically, they were shorted 30 minutes of pay. 46. When Plaintiff Marano noticed Defendant paying her for fewer hours than she had worked, she inquired about this to Shallene Stephenson, who worked as an assistant in Defendant s payroll/accounting department. Ms. Stephenson explained to Plaintiff Marano that Defendant had a policy of uniformly deducting 30 minutes from all servers pay for a meal break each shift, regardless of whether the server actually took the break. 47. In addition, both Plaintiff Marano and Plaintiff Schultz discussed Defendant s policy pertaining to the automatic deduction of the 30 minutes with other servers that had started working for Defendant before them. Those servers confirmed that they too had been informed by Defendant of its policy to deduct 30 minutes, regardless of whether servers actually took a break, and that this had been the policy in place throughout their employment with Defendant. 48. Defendant also received complaints from servers pertaining to its policy of automatically deducting 30 minutes. 49. The MFLSA s minimum wage rate has been $6.15 per hour at all times in the three years prior to the filing of this Complaint through the present. 50. Accordingly, because Defendant only paid its servers the base minimum wage rate of $6.15 per hour, Defendant s illegal policy of systematically deducting 30 8

9 CASE 0:14-cv Document 1 Filed 05/06/14 Page 9 of 23 minutes resulted in servers being paid less than the MFLSA s required minimum wage of $6.15 per hour. 51. Defendant s illegal policy of systematically deducting 30 minutes also brought its servers hourly wage further below the FLSA s required $7.25 per hour. 52. Defendant was aware that its practice of automatically deducting 30 minutes of pay from its servers was illegal. 53. In approximately mid-2013, Plaintiff Marano inquired to her supervisor about Defendant s policy of automatically deducting 30 minutes for meal breaks. Plaintiff s supervisor acknowledged that it had been Defendant s policy previously to deduct 30 minutes from all servers each day; however, it had changed its policy that year. Plaintiff Marano s supervisor explained that, since the policy change, Defendant no longer automatically deducted 30 minutes from servers and that servers were allowed to clock out and take a break. Further, unlike prior to the policy change, the supervisor informed Plaintiff Marano that Defendant would compensate her for the full shift. FACTUAL ALLEGATIONS RELATED TO DEFENDANT S FAILURE TO PAY ALL OVERTIME OWED UNDER THE FLSA 54. Plaintiffs re-allege and incorporate by reference the above paragraphs as if fully set forth herein. 55. The FLSA requires employers such as Defendant to compensate employees at a rate of not less than one and one-half times the regular rate of pay for work performed in excess of forty (40) hours per work week. 9

10 CASE 0:14-cv Document 1 Filed 05/06/14 Page 10 of During their employment with Defendant, Plaintiffs and other servers, all of whom are non-exempt employees, worked more than forty (40) hours per week in some weeks. 57. The weeks in which Plaintiffs and the other servers worked more than forty (40) hours per week are knowable from Defendant s timekeeping records. 58. Servers who worked more than forty (40) hours per week, including Plaintiffs, were deprived of the overtime wages they were guaranteed by law. 59. Specifically, as discussed above, Plaintiffs and the other servers should have been paid $7.25 per hour. Their overtime rate, therefore, should have been one and one half (1.5) times $7.25, the legally required minimum wage rate. However, Defendant only paid Plaintiffs and the other servers $6.15 per hour and calculated overtime at one and one-half (1.5) times the rate of $6.15. Because of this, Defendant did not pay Plaintiffs and the other servers all overtime compensation to which they were entitled under the law. 60. Defendant was aware, or should have been aware, that its servers, including Plaintiffs, performed work that required payment of overtime compensation at one and one-half (1.5) times the legally required minimum wage rate of $7.25. FACTUAL ALLEGATIONS RELATED TO DEFENDANT S UNLAWFUL TIP POOLING PRACTICES UNDER THE MFLSA 61. Plaintiffs re-allege and incorporate by reference the above paragraphs as if fully set forth herein. 10

11 CASE 0:14-cv Document 1 Filed 05/06/14 Page 11 of Defendant s cocktail servers, including Plaintiff Marano, received gratuities directly from patrons in the bar. 63. From approximately mid-2013 to the present, Defendant has unlawfully required its cocktail servers, including Plaintiff Marano, to share a portion of their gratuities with management, in violation of the MFLSA. 64. Specifically, in approximately mid-2013, Defendant implemented a policy which required Plaintiff Marano and all other cocktail servers to tip-out a percentage of their total sales that were paid by credit card to Defendant. 65. That is, if a cocktail server s customers on a given shift purchased more than $55 in food and/or liquor by credit card, that cocktail server was then required to turn over an amount equal to ten percent (10%) of those sales to Defendant s bar manager from that cocktail server s own gratuities. 66. The MFLSA at Minn. Stat , subd. 3, prohibits employers from requiring their employees to contribute or share a gratuity received by the employee with the employer or contribute any or all of the gratuity to a fund or pool operated for the benefit of the employer, and prohibits employers from coercing employees to share gratuities or otherwise participating in the agreement to share gratuities. 67. Thus, Defendant s policy and practice of requiring cocktail severs to share a portion of their gratuities with management violates the MFLSA. 68. As a result of Defendant s conduct, Plaintiff Marano and all other cocktail servers have been denied the full value of the gratuities given to them by customers at the Holiday Inn on the Lake from approximately mid-2013 to the present. 11

12 CASE 0:14-cv Document 1 Filed 05/06/14 Page 12 of 23 FLSA COLLECTIVE ACTION ALLEGATIONS 69. Plaintiffs re-allege and incorporate by reference the above paragraphs as if fully set forth herein. 70. Plaintiffs bring Counts I and III below on behalf of themselves and all individuals similarly situated; specifically, the following proposed FLSA Collective: All persons who worked as dining room and/or cocktail servers for Defendant Right Choice Lodging, LLC d/b/a Holiday Inn on the Lake, at any time since three years prior to the filing of this Complaint (the proposed FLSA Collective ). 71. Plaintiffs and the FLSA Collective are victims of Defendant s widespread, repeated, systematic and consistent illegal policies that have resulted in violations of their rights under the FLSA, 29 U.S.C. 201 et seq., and that have caused significant damage to Plaintiffs and the FLSA Collective. 72. Defendant willfully engaged in a pattern of violating the FLSA, 29 U.S.C. 201 et seq., as described in this Complaint in ways including, but not limited to, failing to pay employees proper minimum wages and overtime compensation. 73. Defendant s conduct constitutes a willful violation of the FLSA within the meaning of 29 U.S.C Defendant is liable under the FLSA for failing to properly compensate Plaintiffs and others similarly situated, and, as such, notice should be sent to the FLSA Collective. There are numerous similarly situated current and former employees of Defendant who have suffered from the common policies and plans of Defendant, and who would benefit from the issuance of a Court-supervised notice of the present lawsuit 12

13 CASE 0:14-cv Document 1 Filed 05/06/14 Page 13 of 23 and the opportunity to join in the present lawsuit. Those similarly situated employees are known to Defendant, and are readily identifiable through Defendant s records. MINNESOTA RULE 23 CLASS ACTION ALLEGATIONS 75. Plaintiffs re-allege and incorporate by reference the above paragraphs as if fully set forth herein. 76. Pursuant to Fed. R. Civ. P. 23(a) and 23(b), Plaintiffs bring Count II on behalf of themselves and the following proposed Minnesota Rule 23 Class: All persons who worked as dining room and/or cocktail servers for Defendant Right Choice Lodging, LLC d/b/a Holiday Inn on the Lake, at any time since three years prior to the filing of this Complaint through the date Defendant stopped automatically deducting 30 minutes of pay from its dining room and cocktail servers wages (the proposed Minnesota Rule 23 Auto-Deduct Class ). 77. Pursuant to Fed. R. Civ. P. 23(a) and 23(b), Plaintiff Marano brings Count IV on behalf of herself and the following proposed Minnesota Rule 23 Class: All persons who worked as cocktail servers for Defendant Right Choice Lodging, LLC d/b/a Holiday Inn on the Lake, at any time from the date Defendant began requiring its cocktail servers to tip out 10% of credit card sales through the date of class certification (the proposed Minnesota Rule 23 Tip Pooling Class ). 78. The persons in the Minnesota Rule 23 Classes are so numerous that joinder of all members of the proposed Minnesota Rule 23 Classes is impracticable. While the precise number of class members has not been determined at this time, Defendant has employed in excess of one hundred (100) individuals as servers at Holiday Inn on the Lake during the applicable limitations period. Defendant has employed well over forty (40) dining room and/or cocktail servers from three years prior to the filing of this Complaint through mid Defendant has employed approximately cocktail 13

14 CASE 0:14-cv Document 1 Filed 05/06/14 Page 14 of 23 servers since mid-2013 and is expected to hire an additional cocktail servers by the beginning of summer Plaintiffs and the proposed Minnesota Rule 23 Classes have been equally affected by Defendant s violations of law. 79. There are questions of law and fact common to the proposed Minnesota Rule 23 Classes that predominate over any questions solely affecting individual members of the proposed Classes, including but not limited to the following, with respect to the proposed Minnesota Rule 23 Auto-Deduct Class: a. Whether Defendant paid Plaintiffs and the proposed Minnesota Rule 23 Auto-Deduct Class at the proper minimum wage rate in light of Defendant s automatic 30 minute pay deduction policy; b. The proper measure of damages sustained by the proposed Minnesota Rule 23 Auto-Deduct Class; and c. Whether the Defendant s actions were willful; and including but not limited to the following, with respect to the proposed Minnesota Rule 23 Tip Pooling Class: d. Whether Defendant unlawfully required Plaintiff Marano and the proposed Minnesota Rule 23 Tip Pooling Class to contribute their gratuities to Defendant or to a fund or pool operated for the benefit of Defendant; and e. The proper measure of damages sustained by the proposed Minnesota Rule 23 Tip Pooling Class. 80. Plaintiffs claims are typical of those of the members of the Minnesota Rule 23 Classes. Plaintiffs, like the other members of the proposed Minnesota Rule 23 Auto- Deduct Class, were subject to Defendant s policy and practices of refusing to pay them required minimum wages, worked straight through their shifts, and had 30 minutes of pay automatically deducted. Plaintiff Marano, like the other members of the proposed 14

15 CASE 0:14-cv Document 1 Filed 05/06/14 Page 15 of 23 Minnesota Rule 23 Tip Pooling Class, was required to contribute a portion of her gratuities to Defendant. Further, Plaintiffs job duties were typical of the Rule 23 Classes, as all class members were servers. 81. Plaintiffs will fairly and adequately protect the interests of the Minnesota Rule 23 Auto-Deduct Class, Plaintiff Marano will fairly and adequately protect the interests of the Minnesota Rule 23 Tip Pooling Class, and the Plaintiffs have retained counsel experienced in complex wage and hour class and collective action litigation. 82. This action is properly maintainable as a class action under Fed. R. Civ. P. 23(b)(3). 83. This action is properly maintainable as a class action under Fed. R. Civ. P. 23(b)(3) because questions of law or fact predominate over any questions affecting individual class members, and a class action is superior to other methods in order to ensure a fair and efficient adjudication of this controversy because, in the context of wage and hour litigation, individual plaintiffs lack the financial resources to vigorously prosecute separate lawsuits in federal court against large corporate defendants. Class litigation is also superior because it will preclude the need for unduly duplicative litigation resulting in inconsistent judgments pertaining to Defendant s policies and practices. There do not appear to be any difficulties in managing this class action. 84. Plaintiffs intend to send notice to all members of the Minnesota Rule 23 Classes to the extent required by Fed. R. Civ. P

16 CASE 0:14-cv Document 1 Filed 05/06/14 Page 16 of 23 CAUSES OF ACTION COUNT I MINIMUM WAGE (Fair Labor Standards Act, 29 U.S.C. 201, et seq.) On Behalf of Plaintiffs and the FLSA Collective 85. Plaintiffs, on behalf of themselves and the FLSA Collective, re-allege and incorporate by reference the above paragraphs as if fully set forth herein. 86. The FLSA, 29 U.S.C. 206, requires employers to pay minimum wages to their employees. It provides that Plaintiffs and those similarly situated were to be compensated by Defendant at a rate of no less than $7.25 per hour beginning July 24, per hour. 87. Defendant violated the FLSA by paying its servers an hourly rate of $ Defendant further violated the FLSA by automatically deducting 30 minutes of pay for meal breaks Plaintiffs and the FLSA Collective did not take. 89. The forgoing conduct, as alleged, constitutes a willful violation of the FLSA within the meaning of 29 U.S.C As the direct and proximate result of Defendant s unlawful conduct, Plaintiffs and the FLSA Collective have suffered and will continue to suffer a loss of income and other damages. Plaintiffs and the FLSA Collective are entitled to damages, liquidated damages, attorneys fees, and costs incurred in connection with this claim. 16

17 CASE 0:14-cv Document 1 Filed 05/06/14 Page 17 of 23 COUNT II MINIMUM WAGE (Minnesota Fair Labor Standards Act, , et seq.) On Behalf of Plaintiffs and the Minnesota Rule 23 Auto-Deduct Class 91. Plaintiffs, on behalf of themselves and the proposed Minnesota Rule 23 Auto-Deduct Class, re-allege and incorporate by reference the above paragraphs as if fully set forth herein. 92. The MFLSA, at Minn. Stat , requires employers to pay minimum wages to their employees. It provides that Plaintiffs and the Minnesota Rule 23 Auto- Deduct Class were to be compensated by Defendant at a rate of no less than $6.15 per hour during the three years prior to the filing of this Complaint. 93. By routinely and systematically deducting 30 minutes of pay for meal breaks Plaintiffs and the Minnesota Rule 23 Auto-Deduct Class did not take, Defendant failed to pay Plaintiffs and the proposed Minnesota Rule 23 Auto-Deduct Class minimum wages for all hours worked, as required by Minn. Stat More specifically, because Defendant set the hourly rate for Plaintiffs and the Minnesota Rule 23 Auto-Deduct Class at exactly $6.15 and then automatically deducting 30 minutes of pay for meal breaks Plaintiffs and the Minnesota Rule 23 Auto- Deduct Class did not take, Defendant failed to pay Plaintiffs and the Minnesota Rule 23 Auto-Deduct Class the full minimum wage required by the MFLSA for all hours worked. 95. By failing to compensate Plaintiffs and members of proposed Rule 23 Auto-Deduct Class, Defendant violated Plaintiffs statutory rights under the MFLSA. 96. Defendant willfully failed and refused to pay Plaintiffs members of the proposed Minnesota Rule 23 Auto-Deduct Class proper minimum wages each week. 17

18 CASE 0:14-cv Document 1 Filed 05/06/14 Page 18 of As a direct and proximate result of Defendant s unlawful conduct, Plaintiffs and members of the proposed Minnesota Rule 23 Auto-Deduct Class have suffered and will continue to suffer a loss of income and other damages. 98. Plaintiffs and the proposed Minnesota Rule 23 Auto-Deduct Class seek damages in the amount of their unpaid minimum wages, and such other legal and equitable reliefs from Defendant s unlawful and willful conduct as the Court deems proper. COUNT III OVERTIME (Fair Labor Standards Act, 29 U.S.C. 201, et seq.) On Behalf of Plaintiffs and the FLSA Collective 99. Plaintiffs, on behalf of themselves and the FLSA Collective, re-allege and incorporate by reference the above paragraphs as if fully set forth herein The FLSA, 29 U.S.C. 207, requires employers to pay their employees for hours worked in excess of forty (40) in an individual work week at a rate no less than one and one-half times their regular hourly rate of pay. The FLSA requires that the regular rate not be less than $ Plaintiffs and the FLSA Collective, at times, worked more than forty (40) hours per week for Defendant and were not compensated at the proper rate for all of their overtime hours worked Specifically, when Plaintiffs and the FLSA Collective worked more than forty (40) hours per week, they were compensated at one and one-half (1.5) times $6.15 and not at one and one-half (1.5) times the applicable federal minimum wage rate of $

19 CASE 0:14-cv Document 1 Filed 05/06/14 Page 19 of The forgoing conduct, as alleged, constitutes a willful violation of the FLSA within the meaning of 29 U.S.C As the direct and proximate result of Defendant s unlawful conduct, Plaintiffs and the FLSA Collective have suffered and will continue to suffer a loss of income and other damages. Plaintiffs and the FLSA Collective are entitled to damages, liquidated damages, attorneys fees, and costs incurred in connection with this claim. COUNT IV DIVERSION OF GRATUITIES (Minnesota Fair Labor Standards Act, Minn. Stat ) On Behalf of Plaintiff Marano and the Proposed Minnesota Rule 23 Tip Pooling Class 105. Plaintiff Marano and the Minnesota Rule 23 Tip Pooling Class incorporate the above paragraphs by reference as if fully set forth herein Plaintiff Marano and the Minnesota Rule 23 Tip Pooling Class received gratuities from customers for personal services rendered within the meaning of Minn. Stat Defendant unlawfully required Plaintiff Marano and the Minnesota Rule 23 Tip Pooling Class to contribute or share a gratuity received by them as employees with Defendant as their employer Defendant unlawfully required Plaintiff Marano and the Minnesota Rule 23 Tip Pooling Class to contribute any or all of a gratuity received by them as employees to a fund or pool operated for the benefit of the employer Defendant s conduct in violation of Minn. Stat was willful and not the result of mistake or negligence Pursuant to Minn. Stat : 19

20 CASE 0:14-cv Document 1 Filed 05/06/14 Page 20 of 23 any gratuity received by an employee or deposited in or about a place of business for personal services rendered by an employee is the sole property of the employee. No employer may require an employee to contribute or share a gratuity received by the employee with the employer or other employees or to contribute any or all of the gratuity to a fund or pool operated for the benefit of the employer or employees. This section does not prevent an employee from voluntarily sharing gratuities with other employees. The agreement to share gratuities must be made by the employees without employer coercion or participation, except that an employer may: (1) upon the request of employees, safeguard gratuities to be shared by employees and disburse shared gratuities to employees participating in the agreement; (2) report the amounts received as required for tax purposes; and (3) post a copy of this section for the information of employees. The commissioner may require the employer to pay restitution in the amount of the gratuities diverted By failing to treat Plaintiff Marano and the Minnesota Rule 23 Tip Pooling Class s gratuities as property of the employees, Defendant violated Minn. Stat By requiring Plaintiff Marano and the Minnesota Rule 23 Tip Pooling Class to contribute and share gratuities received by them with the employer, Defendant violated Minn. Stat As a direct result of Defendant s conduct, Plaintiff Marano and the Minnesota Rule 23 Tip Pooling Class were unjustly deprived of their rightful property. PRAYER FOR RELIEF WHEREFORE, Plaintiffs, on behalf of themselves and the proposed FLSA Collective, pray for relief as follows: a) Designation of this action as a collective action on behalf of the FLSA Collective and prompt issuance of notice pursuant to 29 U.S.C. 216(b) to all similarly situated members of the FLSA Collective apprising them of the pendency of this action, and permitting them to assert timely FLSA claims in this action by filing individual consent forms pursuant to 29 U.S.C. 216(b); 20

21 CASE 0:14-cv Document 1 Filed 05/06/14 Page 21 of 23 b) Judgment against Defendant for an amount equal to Plaintiffs and the similarly situated employees unpaid back wages at the applicable minimum wage and overtime rates; c) A finding that Defendant s violations of the FLSA are willful; d) An amount equal to Plaintiffs and those similarly situated employees damages as liquidated damages; e) All costs and attorneys fees incurred prosecuting this claim; f) An award of prejudgment interest (to the extent liquidated damages are not awarded); g) Leave to add additional plaintiffs or claims by motion, the filing of written consent forms, or any other method approved by the Court; and h) All further relief as the Court deems just and equitable. WHEREFORE, Plaintiffs as Class Representatives, on behalf of themselves and the proposed Minnesota Rule 23 Auto-Deduct Class pray for relief as follows: i) Certification of this action as a class action pursuant to Fed. R. Civ. P. 23 on behalf of the Minnesota Rule 23 Auto-Deduct Class and the appointment of Plaintiffs as Class Representatives and their counsel as Class Counsel; j) Judgment against Defendant for an amount equal to Plaintiffs and the Minnesota Rule 23 Auto-Deduct Class s unpaid back wages at the applicable minimum wage rates; k) A finding that Defendant s violations of the MFLSA are willful; l) An amount equal to Plaintiffs and the Minnesota Rule 23 Auto-Deduct Class s damages as liquidated damages; m) All costs and attorneys fees incurred prosecuting this claim; n) An award of prejudgment interest (to the extent liquidated damages are not awarded); 21

22 CASE 0:14-cv Document 1 Filed 05/06/14 Page 22 of 23 o) Leave to add additional plaintiffs or claims by motion or any other method approved by the Court; p) All further relief as the Court deems just and equitable. q) All damages, liquidated damages, civil penalties, and prejudgment interest available; r) All costs and attorneys fees incurred prosecuting this claim; and s) All further relief as the Court deems just and equitable. WHEREFORE, Plaintiff Marano, as Class Representative, on behalf of herself and the proposed Minnesota Rule 23 Tip Pooling Class pray for relief as follows: t) Certification of this action as a class action pursuant to Fed. R. Civ. P. 23 on behalf of the Minnesota Rule 23 Tip Pooling Class and the appointment of Plaintiff Marano as Class Representative and her counsel as Class Counsel; u) Judgment against Defendant for an amount equal to Plaintiff Marano and the Minnesota Rule 23 Tip Pooling Class s diverted gratuities; v) An amount equal to Plaintiffs and the Minnesota Rule 23 Tip Pooling Class s damages as liquidated damages; w) All costs and attorneys fees incurred prosecuting this claim; x) An award of prejudgment interest (to the extent liquidated damages are not awarded); y) Leave to add additional plaintiffs or claims by motion or any other method approved by the Court; z) All further relief as the Court deems just and equitable. aa) bb) cc) All damages, liquidated damages, civil penalties, and prejudgment interest available; All costs and attorneys fees incurred prosecuting this claim; and All further relief as the Court deems just and equitable. 22

23 CASE 0:14-cv Document 1 Filed 05/06/14 Page 23 of 23 DEMAND FOR JURY TRIAL Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiffs, those similarly situated, and members of the proposed Minnesota Rule 23 Classes demand a trial by jury. Dated: May 6, 2014 NICHOLS KASTER, PLLP /s/anna P. Prakash Steven Andrew Smith, MN Bar No Anna P. Prakash, MN Bar No IDS Center, 80 South 8th Street Minneapolis, MN Telephone (612) Fax (612) ATTORNEYS FOR PLAINTIFFS 23

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