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Basina v. Thai

United States District Court, N.D. Illinois, Eastern Division

November 21, 2016

FABIAN BASINA and MIKHAIL RUIZ, Plaintiffs,
v.
SUSHI THAI, Defendant.

          MEMORANDUM OPINION AND ORDER

          Milton I. Shadur Senior United States District Judge

         Fabian Basina ("Basina") and Mikhail Ruiz ("Ruiz") have sued their former employer, Sushi Thai, a restaurant in Libertyville, Illinois under the Fair Labor Standards Act ("FLSA") (29 U.S.C. §§ 201-219) and the Illinois Minimum Wage Law ("Illinois Law") (820 ILCS 105/1-105/15). Plaintiffs have filed motions for partial summary judgment on the ground that they were underpaid for the hours they worked in violation of those state and federal minimum wage laws.

         Background

         Sushi Thai is owned by Mutjarin Nakanant, who goes by the name "Cathy" (C. Dep. 7:23-8:9).[1] Cathy's youngest son Manocha Nakanant, who goes by the name "Mike, " and his wife Heather Basina ("Heather") manage the restaurant along with Cathy (M. Dep. 4:14, 6:17-18, 9:12-21). Heather is the sister of one of the plaintiffs, Fabina Basina ("Basina") (C. Dep. 11:18-20). At certain times Heather, Mike and Basina paid Cathy rent to live in a house that she owned (C. Dep. 40:2-12).

         Ruiz was employed as a tipped server/waiter, and he was paid at a reduced hourly rate (called a "tip rate") of $5 (P. St. ¶¶ 3, 6).[2] Sushi Thai operated a "tip pool" under which tips were collected and distributed according to a predetermined formula at the end of each shift (P. St. ¶ 7). Mike, the manager, calculated and recorded tip pool distributions each day (M. Dep. 49-53). Mike testified that at the end of a shift all tips are pooled, and the restaurant first deducts 5% to cover the asserted cost of processing credit cards (M. Dep. 36:8-17). Then 15% of the tips are given to the sushi bar employees, with 20% of that sum going to the kitchen (M. Dep. 33:13-19), after which 15% of what remains in the total tip pool is given to the busboy (M. Dep. 35:22-36:1). Finally the servers split what remains of the tips after those distributions (M. Dep. 24:6-12). Sushi Thai guaranteed servers $95 per day, or $60 for the dinner shift and $35 for the lunch shift -- and in the event servers' tips came up short, the restaurant made up the difference (M. Dep. 59:7-62:22).

         Basina was employed as a Sushi apprentice, and he was paid at a rate that corresponded to the hours he worked each week, which the restaurant characterized at times as a "day rate" (Amended Answer [Dkt. No. 32] ¶ 1; P. St. ¶¶ 12, 13).[3] But Basina's pay and hours worked are not entirely discernable from the record for several reasons.

         First, in Basina's case Sushi Thai did not comply fully with provisions of the FLSA or its implementing regulations that require employers to keep contemporaneous records of wages and hours (29 U.S.C. § 211(c) -- quoted next -- as to the FLSA and 29 C.F.R. §§ 516.1, 516.2, 516.5 and 516.6 as to the regulations):[4]

Every employer subject to any provision of this chapter . . . shall make, keep, and preserve such records of the persons employed by him and of the wages, hours, and other conditions and practices of employment maintained by him, and shall preserve such records for such periods of time . . . as necessary or appropriate for the enforcement of the provisions of this chapter or the regulations . . .

         Second, Sushi Thai appears to have had an informal arrangement with Basina as to his wages and hours. Cathy and Mike testified that they paid Basina a rate of $100 per day ($110 on weekends), a number that was assertedly based on a 40 hour work week at minimum wage per hour (Am. Ans. ¶ 1; C. Dep. 47: 5-8; M. Dep. 56:5-14).

         Basina's rate of pay is listed as a "salary" of $26, 520 in Sushi Thai's tip pool records (S. Exs. C, D), and as $24, 440 on the employee contact list generated May 31, 2012 (S. Ex. D [Dkt. No. 78-4] at 32), [5] but Sushi Thai later stipulated that Basina was for all intents and purposes a by-the-hour employee (Am. Ans. ¶ 1). Sushi Thai also submitted weekly emails from its manager Mike to the restaurant's accountant that show Basina was paid varying dollar amounts each week between 2012 and 2014, but neither the emails nor Basina's paychecks indicate the hours worked during those weeks (S. St. ¶14; S. Ex. F). Further complicating matters, Cathy testified (1) that she lent Basina large sums of money and deducted varying amounts from those paychecks to repay the loans and (2) that she deducted small amounts of rent from Basina's paychecks that he owed her to live in a house she owned (C. Dep. 34: 7 - 40:12). Sushi Thai did not reflect Basina's repayments and loans to and from the restaurant's owner in its records.

         There is only one indication in the record of Basina's hours: an email dated February 11, 2016 from Mike to his lawyer that reconstructs estimates of the hours Basina worked between December 1, 2012 and February 21, 2014 based on documentation of his weekly paychecks (P. Ex. 5). As to that email Sushi Thai admits that "Manager 'Mike' calculated the amount of hours Plaintiff Basina worked based on the paychecks, " but it is silent on the accuracy of his estimates (S. St. ¶16).

         Legal Standard

         Every Rule 56 movant bears the burden of establishing the absence of any genuine issue of material fact (Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)). For that purpose courts consider the evidentiary record in the light most favorable to nonmovants and draw all reasonable inferences in their favor (Lesch v. Crown Cork & Seak Co., 282 F.3d 467, 471 (7th Cir. 2002)). Courts "may not make credibility determinations, weigh the evidence, or decide which inferences to drawn from the facts" in resolving motions for summary judgment (Payne v. Pauley, 337 F.3d 767, 770 (7th Cir. 2003)). But a nonmovant must produce more than "a mere scintilla of evidence" to support the position that a genuine issue of material fact exists (Wheeler v. Lawson, 539 F.3d 629, 634 (7th Cir. 2008)) and "must come forward with specific facts demonstrating that there is a genuine issue for trial (id.). Ultimately summary judgment is warranted only if a reasonable jury could not return a verdict for the nonmovant (Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

         Ruiz's Claims

         Ruiz contends that Sushi Thai's practice of deducting 5% from the tip pool before distributing to servers violates the legally relevant provisions and that Sushi Thai should therefore be prohibited from claiming state or federal tip credit exemptions (S. Mem. 2). Under the FLSA and the Illinois Law an employer may offset its minimum wage obligations with tips that its employee actually receives if that employee regularly receives gratuities (Section 203(m); Illinois Law § 4(a)(1), (c)). But an employer may not claim the federal tip credit ...


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