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Li v. Fu Hing Main Restaurant Inc.

United States District Court, D. Massachusetts

August 2, 2018

SAM LI, Plaintiff,
v.
FU HING MAIN RESTAURANT, INC. d/b/a FUHING CHINESE RESTAURANT, and MAN CHEE LI, Defendants.

          MEMORANDUM AND ORDER ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT (#36).

          Page Kelley United States Magistrate Judge.

         I. Introduction.

         This is a case in which a delivery driver alleges that a restaurant did not pay him fair wages. Defendants' motion for summary judgment is denied because there are disputed issues of fact as to whether the restaurant meets the required annual gross sales amount of $500, 000 as required by the Fair Labor Standards Act (FLSA, or the Act).

         Plaintiff Sam Li filed a four-count complaint seeking monetary relief against a restaurant and the restaurant's owner, under the FLSA, 29 U.S.C. § 201 et seq., (Count I, minimum wage violations, and Count III, overtime wage violations); the Massachusetts Minimum Fair Wage Act, Mass. Gen. Laws ch. 151, §§ 1A-1B (Count II); and the Massachusetts Wage Act, Mass. Gen. Laws ch. 149, §§ 148, 150, (Count IV). (#1.) Plaintiff alleges that the Fuhing Chinese Restaurant in Haverhill, Massachusetts, and the restaurant's owner, Man Chee Li, violated his rights under these statutes by failing to pay him a fair wage, including minimum wages and overtime pay, which he had earned while working as a delivery driver. Id. at 2. He seeks unpaid wages, liquidated damages, pre-and post-judgment interest, and attorneys' fees and costs. Id.

         Defendants filed a Motion for Summary Judgment (#36), claiming that they are exempt from the FLSA because plaintiff has not established that he was engaged in interstate commerce, and further because he has not established that the restaurant meets the required annual gross sales amount of $500, 000. (#36-4 at 2.) Plaintiff opposed and defendants filed a response (##37-1, 38.)

         II. The Facts.

         The facts are undisputed except as indicated. Fuhing Chinese Restaurant is located in Haverhill, Massachusetts. (#37-1 ¶ 2.) Almost all of the restaurant's income is derived from takeout and delivery orders; it is not an “eat-in” restaurant. Id. ¶ 3; ##36-4 at 3; 39 at 31. Plaintiff worked for defendants as a delivery driver for roughly two years, in 2014 and 2015. (#37-1 ¶ 1.) During this period, defendants employed 3 to 4 people, including plaintiff and owner Man Chee Li. Id. ¶ 4. During all relevant times, plaintiff was the only delivery driver employed; the owners' son filled in when plaintiff was not working. Id. ¶ 5; #39 at 44.[1]

         In support of their motion for summary judgment, defendants submitted tax returns that show the restaurant's gross annual sales in 2014 were $258, 646.00 and in 2015 were $301, 643.00. (#37-1 ¶ 10.) Defendants also produced transcripts from the Internal Revenue Service and that they claim verified the information contained in their tax returns. Id. ¶ 11. They also state that their accountant “verified the Fu Hing's Gross annual income for 2014-16.” Id. ¶ 12. Defendants further asserted that in 2014 the Commonwealth of Massachusetts Executive Office of Labor and Workforce Development conducted an audit and found defendants' records “in compliance with the law.” Id. ¶ 13. In addition to these documents, defendants produced bank deposit forms from the relevant years to show that their deposits were in accordance with their tax returns. (##36-8, 36-9.) Defendant Man Chee Li stated in her declaration attached to the motion for summary judgment that the restaurant has never had over $500, 000 in gross annual sales. (#38 ¶ 11.)

         In the complaint, plaintiff alleges that during the first year he worked for the restaurant, December 2013 to December 2014, he worked seven days a week, twelve hours per day, except weekends, when he worked thirteen and a half hours per day on Fridays and Saturdays, and eleven hours on Sundays. (#1 at 5.) In the second year, from January 2015 to December 2015, he worked six days a week, the same hours as before, except he had Tuesdays off. Id. He alleges that defendants paid him a monthly wage of $1, 200 in cash, regardless of the hours he worked, and thus paid him less than the minimum wage and did not pay him overtime wages due. Id. at 4-6. At his deposition, it became clear that plaintiff did not have any records to substantiate his claims. He estimated the hours he worked by referring to the business hours printed on the restaurant's menu; he alleges that he worked whenever the restaurant was open for business. (#39 at 61-2.)

         The parties have conflicting methods of calculating the restaurant's gross annual sales. In the complaint, other than an allegation that defendants had gross sales in excess of $500, 000, the only statement having to do with the restaurant's sales is that the restaurant charged “a minimum of $10 for delivery orders.” (#1 at 3, 6.) At his deposition, plaintiff testified that he made 40 to 50 deliveries on an average day, but counsel for defendants never asked him about the value of the orders. (#39 at 33.) Defendants claim that plaintiff would deliver approximately 30 orders per day, and that the average price of each order was “$10 or less.” (#37-1 ¶¶ 7-8.) In his declaration attached to his opposition to defendants' motion for summary judgment, plaintiff asserts that the average price of each order was between $20 and $30, and “there were occasional party platters that cost $100-200.” (#37-4 ¶ 8.) He estimates that “the ratio of takeout to delivery was approximately 4:6 during warmer months and 6:4 during colder months.” Id. ¶ 14. He further states that approximately 60 percent of the customers paid in cash. Id. ¶ 10.

         Plaintiff contends that according to his “personal knowledge and observations made throughout his employment, ” given the number of deliveries he made and the average price of each one, the restaurant made gross sales of at least $409, 500 per year from deliveries alone, not counting other sales. (#37 at 9.)[2] Plaintiff argues that since takeout orders must have added to this number, his calculations bring “Defendant's annual gross sales to above $500, 000.” (#37-1 ¶ 14.)

         Defendants argue that accepting plaintiff's claim that he made 50 deliveries daily, 365 days per year, but reducing the average delivery to $10, “the total amount would be $182, 000.” (#36-4 at 10.) Defendants further argue that as deliveries accounted for “almost all revenue, ” defendants would have to generate another $317, 500 from takeout orders to reach the $500, 000 threshold, which “any reasonable juror would surely conclude” was an unrealistic calculation. Id.

         III. Summary Judgment Standard

         “Summary judgment is utilized to look behind the facade erected by the pleadings and assay the parties' proof in order to determine whether a trial will serve any useful purpose.” Plumley v. S. Container, Inc., 303 F.3d 364, 367 (1st Cir. 2002). Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c). “‘Material' refers to a contested fact that has the potential to change the outcome of the trial under the applicable law if the contest is resolved in the nonmovant's favor. ‘Genuine' means that the evidence about the contested fact is such that a reasonable jury could ...


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