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Hilda L. Solis, Secretary of Labor, United States Department of Labor v. El Matador

May 3, 2011

HILDA L. SOLIS, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, PLAINTIFF,
v.
EL MATADOR, INC., EL CAPORAL, INC., CORPORATIONS, AND DOLORES ONATE AND RICARDO ONATE, INDIVIDUALS, DEFENDANTS.



The opinion of the court was delivered by: Michael P. McCUSKEY Chief U.S. District Judge

E-FILED

Tuesday, 03 May, 2011 02:56:52 PM

Clerk, U.S. District Court, ILCD

OPINION

This case is before the court for ruling on the Motion for Summary Judgment Against Dolores Onate and Ricardo Onate (#82) filed by Plaintiff, Hilda L. Solis, Secretary of Labor. Defendants Dolores Onate (Dolores) and Ricardo Onate (Ricardo) have not filed a Response to the Motion. This court has carefully considered Plaintiff's arguments and the documents filed. Following this careful and thorough consideration, Plaintiff's Motion for Summary Judgment (#82) is GRANTED.

FACTS*fn1

El Matador, Inc. and El Caporal, Inc. are corporations which operate restaurants in Decatur, Illinois. The restaurant operated by El Caporal and the two restaurants operated by El Matador were full-service establishments that prepared Mexican-style food and were open to the public. Employees at all three restaurants handled goods that moved in interstate commerce. In September 2007, the Wage and Hour Division of the U.S. Department of Labor began an investigation of both corporations under the Fair Labor Standards Act (FLSA). The investigation covered the period from January 1, 2006, to January 29, 2008. During calendar years 2006, 2007, and 2008, the annual dollar volume of each of the three restaurants operated by the corporations exceeded $500,000.

Dolores was the sole owner and president of El Matador during the investigatory period and also owned 75% of El Caporal during the investigatory period. She was president of El Caporal in 2007 and 2008 and had check writing authority for El Caporal's corporate account. She, along with Robin Reyes and Arturo Alvarez, was responsible for the day-to-day management of the restaurant operated by El Caporal. Dolores and Ricardo, who is Dolores' brother, determined the policies, practices, and procedures relating to compensation, including compensation for overtime, paid to El Caporal employees. Dolores and Ricardo were responsible for signing and distributing paychecks to El Caporal employees. They also checked El Caporal's employees' time records for accuracy. Dolores hired Ricardo to manage one of the restaurants operated by El Matador. Ricardo directed the restaurant employees and set the schedule for the restaurant employees during the investigatory period. He also hired employees during this time period. Ricardo was involved in ensuring that minimum wage and overtime were paid to the restaurants employees and was responsible for paperwork at the restaurant. Dolores and Ricardo were responsible for the day-to-day management of both of the restaurants operated by El Matador. They determined the policies, practices, and procedures related to compensation, including compensation for overtime, paid to El Matador employees.

The investigation found that some of the employees at all three restaurants operated by El Caporal and El Matador did not receive any proceeds from paychecks they received, they only received tips from the customers they served. They were required to return the paychecks they were given to the restaurant. After the Wage and Hour investigation commenced, Dolores changed the pay policy at the El Caporal restaurant and servers were allowed to keep their paychecks. The investigation also found that employees who did not work as servers were not paid minimum wage or overtime compensation. Employees were told by Dolores not to punch in earlier than 9:00 a.m. even if they began working before then. The Wage and Hour Division's investigation determined that Dolores and Ricardo withheld minimum wages and overtime compensation due to 34 of their employees at the two El Matador restaurants during the investigatory period in the amount of $387,429.87. The Wage and Hour Division's investigation also determined that Dolores and Ricardo withheld minimum wages and overtime compensation due to 30 employees at the El Caporal restaurant during the investigatory period in the amount of $187,421.41. Plaintiff provided detailed documentation regarding how the investigation determined these amounts.

The Wage and Hour Division had previously conducted an investigation of one of the restaurants operated by El Matador during October and November 2005. During the previous investigation, Wage and Hour Investigator Amy DeBisschop gave Ricardo the following materials:

(1) The Handy Reference Guide to the FLSA; (2) a copy of 29 C.F.R. Part 516; (3) a copy of 29 C.F.R. Part 785; (4) a non-technical Wage and Hour overtime publication; (5) a Wage and Hour FLSA poster; and (6) a Wage and Hour FMLA poster. DeBisschop sent enough publications for the two El Matador restaurants and the El Caporal restaurant. DeBisschop urged Ricardo to share the information he learned during the investigation with the other two restaurants. The evidence showed that Wage and Hour posters were posted at the restaurants.

PROCEDURAL HISTORY

On October 3, 2008, Plaintiff filed a Complaint (#1) against El Matador Inc., El Caporal Inc., Dolores and Ricardo. On November 20, 2008, Plaintiff filed an Amended Complaint (#4) against the same four Defendants. In the Amended Complaint (#4), Plaintiff was seeking to recover unpaid minimum wage and overtime compensation owing to Defendants' employees, together with an equal amount as liquidated damages. Plaintiff also sought to enjoin Defendants from violating the FLSA. On December 29, 2008, Defendants, through counsel, filed an Answer (#6) to the Amended Complaint. Additional attorneys entered their appearance on behalf of Defendants on March 18, 2009, and April 7, 2009.

The parties had numerous discovery disputes and Magistrate David G. Bernthal entered Orders (#25, #27, #38, #43, #44) resolving the disputes. On May 3, 2010, Defendants' Attorneys filed a Motion to Withdraw as Counsel of Record for Defendants (#61). On July 13, 2010, a hearing was held before Judge Bernthal. Judge Bernthal granted the Motion (#61) and allowed Defendants' attorneys to withdraw from the case. Dolores and Ricardo stated that they were seeking to hire new counsel, but would proceed pro se if necessary. On August 16, 2010, a hearing was held before Judge Bernthal. Dolores and Ricardo appeared without counsel. Judge Bernthal noted that the corporate defendants were unrepresented. ...


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