United States District Court, N.D. Ohio, Eastern Division
R. ALEXANDER ACOSTA, 1 Secretary of Labor, United States Department of Labor, Plaintiff,
CPS FOODS, LTD., et al., Defendant.
MEMORANDUM OF OPINION AND ORDER [RESOLVING ECF NOS.
Y. Pearson United States District Judge.
before the Court is Plaintiff's Motion for Partial Summary
Judgment. ECF No. 57. Defendant Gillian Harris has
responded. ECF No. 61. Plaintiff has filed a
reply in support of the motion. ECF No. 63. For the
following reasons, the Court grants Plaintiff's motion.
the Secretary of Labor, brings this action against Defendant
Gillian Harris for violations of the Fair Labor Standards Act
of 1938 (“FLSA”). ECF No. 1. Plaintiff
seeks the recovery of unpaid minimum wages, unpaid overtime
wages, and an injunction enjoining and restraining Gillian
Harris from violating the provisions of Sections 6,
11, and 15 of the FLSA.Plaintiff's
motion addresses all but three claims in this matter: (1) a
minimum wage claim with respect to one employee; (2) an
overtime claim with respect to one employee; and (3) a child
labor claim. ECF No. 57 at PageID #: 216. For
reasons explained below, trial in this matter will be limited
to these three claims.
Acquisition of the Brown Derby Roadhouse
Harris and her father, Gary Harris, took over operation of
the Brown Derby Roadhouse restaurant in Akron, Ohio on
January 1, 2013. ECF No. 57-6 at PageID #: 330. The
restaurant was owned by CPS Foods, Ltd., and, in turn, CPS
Foods, Ltd. was owned in full by The International Gold
Standard, LLC. ECF No. 56 at PageID #: 205. Gillian
Harris was the sole member of The International Gold
starting at the Brown Derby, Gillian Harris performed
numerous functions. By way of example, she liaised with the
payroll company, and she had the ability to correct time
entries. ECF No. 57-6 at PageID #: 319-21. Her
interactions with the payroll company included getting the
payroll company to end its practice of charging Brown Derby
employees five dollars for each paper check the employee
received. Id. at PageID #: 353. Additionally, she
supervised the kitchen, the servers, the cooks, and the
assistant manager, though her father would also supervise the
kitchen sometimes. Id. at PageID #: 332. Gillian
Harris would review applications and conduct some interviews,
but her father would make the hiring decisions. Id. at
PageID #: 333. Gillian Harris would also make the
decision to end an employee's shift early due to slow
work flow; however, she did not decide which employee had to
end his or her shift, because that was determined by the time
at which each individual was scheduled to begin his or her
shift. Id. at PageID #: 340-41. Finally, Gillian
Harris informed the staff and made sure that they followed
the requirement that no minors could operate the trash
compactor, because she had received word that a former owner
faced a fine due to a violation of this regulation. Id.
at PageID #: 355-56.
Harris testified that he controlled “all the activities
of CPS Foods.” ECF No. 57-7 at PageID #: 417.
He also testified that he was the manager of the Brown Derby.
Id. at PageID #: 420. Gary Harris claimed that he
“managed the back of the house, ” and Gillian
Harris “managed the front of the house.” Gillian
Harris characterized her role as subordinate to her father.
ECF No. 57-6 at PageID #: 334. During a revocation
hearing in another matter, however, Gary Harris testified
that his daughter had purchased the Brown Derby and he was
“helping out” in exchange for the occasional free
meal. ECF No. 57-8 at PageID #: 540-41.
The Table Rental Program
after taking over the Brown Derby, the employees voted on two
possible changes to the compensation system, choosing to
implement a table rental system. ECF No. 57-7 at PageID
#: 449. Under the table rental system, servers kept all
of the tips that they made, but they had to pay a
one-dollar-per-table rental fee. Id. The servers
working under the table program were treated as independent
contractors. ECF No. 57-6 at PageID #: 452. Though
the employees in the table rental program still had to clock
in and out, Gillian Harris testified that she believed that
she would go in and change the times in the time-keeping
system to reflect zero hours worked so the payroll company
did not generate paycheck for those employees. Id. at
PageID #: 347-48.
Harris testified that Gary Harris was the driving force
behind the table rental program. Id. at PageID #:
349. She also testified that she was against the table
rental system on practical grounds Id. at PageID #:
351. Although Gillian Harris was not a proponent of the
table rental program, she collected the fees for the program.
Id. at PageID #: 347.
an attorney informed Gillian Harris that the table rental
program was illegal. Gillian Harris found that some servers
started to develop unruly attitudes after implementation of
the table rental program, so she reached out to John Myers, a
lawyer. Id. at PageID #: 349. Myers told Gillian
Harris that a restaurant in Massachusetts had tried a similar
venture, but a court had concluded that the servers did not
qualify as independent contractors. Id. Once Gillian
and Gary Harris learned this, they ended the table rental
program. Id. at PageID #: 349-50. Gary Harris
testified that once he learned that the program violated the
law, the Brown Derby “acquiesced and changed.”
ECF No. 57-7 at PageID #: 452.
has offered a declaration from Dale Zimmerman, an
investigator for the U.S. Department of Labor, Wage and Hour
Division, as an exhibit to the motion for partial summary
judgment. ECF No. 57-2.
investigated CPS Foods and the Brown Derby to determine
whether CPS Foods was in compliance with FLSA's minimum
wage, overtime, recordkeeping, and child labor provisions.
Id. at PageID #: 237. This investigation began in
May 2013. Id. at PageID #: 238. Through his
investigation, Zimmerman learned that Gillian and Gary Harris
became involved in the operation of CPS Foods, and that a
table rental program existed at the Brown Derby from late
January 2013 to mid-May 2013. Id.
averred that he was able to determine the time period that
the table rental program was in effect from a review of the
payroll records that showed very few or no hours reported for
employees that worked at the Brown Derby during the late
January to mid-May 2013 period, followed by records that
showed many of those employees working regular hours at the
Brown Derby after mid-May 2013. Id. Additionally,
starting February 2013 many of these employees began
reporting no tips, despite reporting significant tips in
prior pay periods. Id. at PageID #: 239.
employees, Zimmerman was able to calculate back wages from
reviewing CPS Foods' payroll records, and therefore, did
not need to reconstruct the hours worked. Id.For
those two employees, the back wage violations totaled
remaining minimum wage violations, which totaled $23, 444.31,
Zimmerman had to performed a more elaborate review.
Id. There were a few payroll records for servers in
the table rental program. Id. These records showed
the employees receiving a wage of $3.93 per hour, but
Zimmerman disregarded these records because both current
employees and Gillian and Gary Harris confirmed that the
servers in the table rental program did not receive wages.
majority of the relevant time period, however, the payroll
records did not show the number of hours an employee worked.
Id. at PageID #: 240. In these instances, Zimmerman
would reconstruct the hours worked using employee statements
and/or averaging hours worked prior to the table rental
program's existence. Id. When Zimmerman used
employee statements to reconstruct the hours worked, the
statements were generally consistent with hours those
employees had worked in prior pay periods. Id. Three
former servers offered declarations to support the hours
calculations. See ECF Nos. 57-9, 57-10, and
57-11. For all servers under the table rental
program, Zimmerman used the full minimum wage of $7.25 per