Pender v. Flying S. Wings

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IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
KAYLA PENDER, individually and on 	:
behalf of all others similarly situated, 	:
:
Plaintiffs, 	:
: 	Case No: 2:21-cv-04292
v. 	:
: 	Judge Algenon L. Marbley
FLYING S. WINGS, INC. et al., 	: 	Magistrate Judge Kimberly A. Jolson
d/b/a Buffalo Wild Wings, 	:
:
Defendants. 	:
Final Judgment
Plaintiff Kayla Pender (“Pender”), on behalf of herself and all others similarly situated,
brought suit against Defendants Flying S. Wings, Inc., Flying Buffalo Inc., Chase & Green Corp.,
Scott Lloyd, and Stephon Green (“Defendants”), alleging violations of the Fair Labor Standards
Act (“FLSA”), 29 U.S.C. § 201, et seq., and the Ohio Minimum Fair Wage Standards Act, O.R.C.
§§ 4111.02 et seq. (ECF No. 42). On February 17, 2026, this Court began a three-day bench trial
to resolve the remaining issues. Based on the findings of fact and conclusions of law stated below,
this Court finds in favor of the Plaintiffs. This Court finds no liability, however, on behalf of the
Individual Defendants, Scott Lloyd and Stephon Green.
I. 	PROCEDURAL HISTORY
Plaintiffs filed the initial Complaint on August 31, 2021, seeking to resolve a FLSA dispute
regarding overtime and minimum wage claims between employee Kayla Pender, on behalf of
herself and all others similarly situated, and her former employer Flying S. Wings, Inc. d/b/a
Buffalo Wild Wings. (ECF No. 1). Plaintiffs also named Scott Lloyd and Stefon Green, two owners
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of the named corporations, as individual Defendants. Plaintiffs then filed an Amended Complaint
on November 4, 2021, and a Second Amended Complaint on June 15, 2022. (ECF Nos. 10, 42).
The claims here arise from Defendants’ alleged practice of paying their employee servers
and bartenders subminimum hourly wages under the tip-credit provisions of the FLSA which also
violates the Ohio Constitution and the Ohio Wage Act. (ECF No. 42 at 2–3). The relevant time
period of the claims asserted here begins on August 31, 2018, three years prior to the Plaintiffs
filing their initial Complaint, and concludes in November 2021, when the Defendants began using
a tip credit acknowledgment form.1
On March 13, 2023, this Court granted Pender’s Motion to Certify Class. (ECF No. 51).
Subsequently, on November 18, 2024, Defendant filed a Motion for Summary Judgment and
Decertification of Collective Action. (ECF No. 107). Pender then filed a Partial Motion for
Summary Judgment. (ECF No. 108). In resolving those motions, this Court found that there were
genuine issues of material fact as to whether the Defendants provided adequate notice to the
employees of the Defendants’ intent to use the tip-credit. Specifically, this Court opined that there
were unresolved questions as to: (1) whether the posters were provided at each location over the
relevant time of this case; and (2) whether those who saw the posters or were told to review the
posters were informed orally, or in some other form, of the employer’s intent to use any tax credit
for that employee’s pay. (ECF No. 122 at 17). Accordingly, this Court denied both parties motions
for summary judgment on those issues. (Id.).
This Court also denied summary judgment as to whether the Plaintiffs were paid adequately
for non-tipped work related to tipped work and for expo work regularly performed by servers. This
1 Plaintiffs contend that the relevant time period extends to 2022. This Court noted in its summary judgment Opinion
& Order, however, that if any Plaintiff signed the tip credit acknowledgment form implemented by Defendants
following this lawsuit, their notice claims end on the date they signed the form. (See ECF No. 122 at 14–15).
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Court granted the motion in favor of Plaintiffs as to non-tipped work for the janitorial and
maintenance-related duties performed during shift change and closing. (Id. at 24, 31, 36).
Additionally, this Court granted Defendants’ motion for summary judgment as to: (1) any claim
that Plaintiffs were not paid appropriately for work performed during their opening shifts; and (2)
notice-related claims after November 2021 for Plaintiffs who signed the notification form, starting
on the date the form was signed. (ECF No. 122 at 45). Finally, this Court denied Defendants’
motion to decertify the collective action, reasoning that all the claims arise from common policies
and are unified by shared legal theories demonstrating the Plaintiffs are similarly situated. (Id. at
44). This case was then scheduled for a bench trial.
The Parties jointly filed a proposed pretrial order confirming that the remaining issues of
fact:
• 	Whether Defendants failed to give Plaintiffs notice of the tip credit provisions as
required by the FLSA;
• 	Whether Defendants required Plaintiffs to incur unreimbursed business expenses and
whether such expenses caused Plaintiffs’ to fall below the minimum in an pay period;
• 	Whether Defendants paid Plaintiffs subminimum hourly wages to perform nontipped
work unrelated to Plaintiffs’ tipped occupation;
• 	Whether Defendants paid Plaintiffs subminimum hourly wages to perform nontipped
work that, although related to Plaintiffs’ tipped occupation, exceeded twenty percent
(20%) of their time worked during each workweek; and
• 	Whether Defendants Scott Lloyd and Stephon Green qualify as “employers” under the
FLSA and Ohio Wage Act.
• 	Whether Plaintiffs may prevail upon their claims when they chose not to clock in under
the classification whereby they would have received the full minimum wage rather than
the tip rate, such as when performing “outs” and “closing” side work.
• 	Whether Defendants acted in good faith by creating and implementing timekeeping and
payroll policies and procedures, including relating to the tip credit and any tip pool, to
properly compensate Plaintiff and all similarly situated employees for all hours worked,
and Defendants had reasonable grounds to believe that their alleged act or omission, if
any, was not a violation of the FLSA, thereby precluding an award of liquidated
damages or a finding of a willful violation of the FLSA.
• 	Whether Plaintiffs cannot establish a willful violation of the FLSA, and therefore
cannot recover beyond the two-year statute of limitations period under the FLSA, 29
U.S.C. § 255(a) and the Ohio Wage Act.
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(ECF No. 169 at 10–11).
At trial, Plaintiffs called Kayla Pender, Sara Bishop, and Chris Beltran. Scott Lloyd and
Stephon Green were also called to testify as witnesses for both Plaintiffs and the Defendants.
II. FINDINGS OF FACT
A. The Parties
During the relevant time period, Defendants Flying S. Wings, Inc., Defendant Flying
Buffalo, Inc., and Defendant Chase & Green Corp. (collectively “the Corporate Defendants”)
owned the four Buffalo Wild Wings restaurants at issue in this matter. Flying S. Wings, Inc.
operated the St. Clairsville restaurant location; Flying Buffalo, Inc., operated the Moundsville,
West 	Virginia and 	Parkersburg, 	West 	Virgina 	restaurant 	locations; 	and 	Chase & 	Green
Corporation operated the Barboursville, West Virgina location. Defendants Scott Lloyd and
Stephon Green are co-owners of Defendants, Flying S Wings, Inc., and 	Flying Buffalo, Inc.
Defendant Stephon Green is also the majority owner of Defendant Chase & Green Corp. All of
the Corporate Defendants maintain their principal place of business in St. Clairsville, Ohio, with
Defendant, Stephon Green listed as the registered agent.
Plaintiff Kayla Pender was employed as a server by Defendant Flying S. Wings at the St.
Clairsville Buffalo Wild Wings restaurant from October 2019 until June 2021. Plaintiff Sara
Bishop also worked as a bartender at the St. Clairsville location from July 2019 to May 2021.
Defendants also employed a number of other servers and bartenders to maintain these four
restaurants. This Court has determined that the testimony of Plaintiffs Pender and Bishop is
representative of all Opt-In Plaintiffs.
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B. Notice of the Tip Credit
1. 	Oral Notice
During the relevant time period, the restaurants maintained an unwritten policy that
employees were to be informed by managers during the orientation process about their rate of pay,
that they would earn tips, that if they did not earn enough tips to satisfy minimum wage, their tips
would be supplemented, and that they could keep 100% of the tips earned. Tr. 338–340. Regional
Manager, Chris Beltran, was responsible for training managers at all four locations on this policy.
Id. Beltran observed multiple managers, including Ben Omaits, onboarding new servers and
following restaurant policy by explaining that tipped employees could keep their tips and that if
they did not earn enough tips to satisfy minimum wage their tips would be supplemented. Tr.
340:6–15. Beltran, however, was not present for the hiring or training of Kayla Pender or Sara
Bishop. Tr. 318–319.
Kayla Pender was interviewed and onboarded by Ben Omaits. Tr. 24:3-8; 26:19–23.
During her interview, Omaits informed Pender she would receive tips. Tr. 149:17–23. Despite the
policy that managers were to orally inform employees of the tip credit, Pender was never informed
of the tip credit during her interview or orientation. Tr. 24:23–25; 25:1–25; 26:1. At no time during
her employment did Buffalo Wild Wings explain the tip credit to Pender. Tr. 30:5–12. Specifically,
no one explained that she was to retain all of her tips, that the restaurant intended to take a tip
credit, the specific dollar amount of the tip credit they intended to take, or that the tip credit would
not apply unless she was informed of the provisions. Tr. 30:5–25. Pender was trained not by a
manager but by another server who did not explain the tip credit. During her employment, Pender
later trained several employees herself, to whom she did not explain the tip credit. Tr 32:1–25;
33:1–3.
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Sara Bishop initially interviewed for employment at the St. Clairsville restaurant with a
manager named Brandy. 277:20–23. During Bishop’s interview, she was told about her position,
her pay, that her pay would be a subminimum wage, and that she would also be earning tips. Tr.
278:1–10. Bishop, however, never had the tip credit explained to her during her employment at
Buffalo Wild Wings, nor did anyone tell her the specific dollar amount of tip credit they intended
to take, that all of her tips were to be retained by herself, or that the tip credit would not apply
unless she was informed of the tip credit provisions. Tr. 226:12–25; 227:1–25; 228:1–8.
2. 	Employee Handbook Notice
During the relevant time period, the Defendants also relied on the employee handbook as
a form of tip credit notice. The employee handbook that was in effect at all four restaurants
contained a section titled “Tipped Employees.” Tr. 321:14–24. The section provided that
“[e]mployees who receive tip income will be provided a written policy statement regarding any
applicable policy on mandatory tip pooling or use of the tip credit to satisfy the minimum wage
obligation.” Tr. 321:25–322:1–5; Jt. Ex. 42. Kayla Pender attested that she never received a written
policy explaining the tip credit at any point during her employment. Tr 29:1-25; 30:1–4. Similarly,
Plaintiff Sara Bishop testified that she was never given a form to read and sign explaining the tip
credit. Tr. 228:5–8. There is no evidence that such written policy existed until November 2021,
after this lawsuit was filed. Tr. 322:14–17. Chris Beltran testified that the restaurants made changes
to their policies following this lawsuit which required tipped employees to sign a written
acknowledgment regarding the tip credit. Tr. 320:1–16. By Mr. Beltran’s own admission, the
restaurants were not following the policy provided in the handbook that required written notice
until after this lawsuit. Tr. 322:6–17.
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3. 	Poster Notice
During the relevant time period, Defendants also displayed Department of Labor posters
in the back of all four restaurants that reflected the relevant federal and state laws, and
specifically discussed the tip credit, where employees could see them. Tr. 340:16–25; 341–347;
D. Ex. 8; 89. The restaurants maintained a policy in which managers were supposed to show new
employees the posters and explain that they were there for their convenience. Tr. 347:16–23.
Plaintiff Pender recalled seeing the poster in the St. Clairsville restaurant, but never read the
poster, and only recalled the poster said “the law” at the top. Tr. 31:4–22. The West Virginia
poster indicated that employers are allowed to choose to claim a tip credit and if so, what the law
requires. D. Ex. 89. Similarly, the Ohio poster defined tipped employees and explained what
employers must do when electing to use the tip credit. D. Ex. 8. Neither poster represented that
the Defendant restaurants intended to use the tip credit.
C. Inappropriate Business Expenses
Defendants maintained a dress code policy that included a uniform shirt, dark pants or
jeans, and nonslip shoes. Tr. 33:4–17. Employees were provided with two free uniform shirts, and
if an employee wanted additional shirts, they could pay for the additional shirts out of pocket. Tr.
33:11–25; 34:1–4. Defendants did not deduct the cost of any uniform shirts, nonslip shoes, or dark
pants from Plaintiffs’ paychecks. Tr. 365:22–25; 366:1–2. Defendants also provided Plaintiffs with
aprons, name tags, and server books. Tr. 167:17–25; 168:1–9. Pender never had to pay for a
walkout, a shortage, a mistaken order, or breakage. Tr. 169:1–12.
D. The POS System and Job Codes
All employee hours were tracked at the restaurants using the Point of Sale (“POS”)
system. Tr. 53:9–13. Employees were to clock in and out using the POS system every shift to
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track all hours worked. Id. When clocking into the POS system, the employee was required to
select a job code, such as “meeting,” “server,” or “bartender.” Tr. 53:16–25; 54:1–4. The
different job code options reflected different hourly wages dependent on the wage code entered.
Tr. 54:5–14. When employees clocked in under the meeting job code, they were paid full
minimum wage, but, when they clocked in under the server or bartender codes, they received the
subminimum wage rate. Id.
The restaurants maintained an unwritten policy that employees were to clock into the
meeting code when performing opening or closing duties, “outs,”2 and other side work. Tr.
236:7–22; 326:25; 327:1–10; 329:11–14. At the start of a shift, an employee could independently
clock into the meeting code to complete their opening duties. Tr. 55:21–25; 56:1–2. Further,
when switching from meeting to server, an employee could also do so without assistance. To
switch to the meeting code at the end of the shift before performing outs or closing duties,
however, employees needed assistance from a manager. Tr. 85: 12–14, 24–25; 86:1–7. An
employee could not independently shift to the meeting code once clocked in under the server
code. Tr. 275:9–18. Additionally, an employee could not independently switch to the meeting
code if performing side work mid shift. Tr.118:24–25; 119:1–20.
The evidence presented at trial demonstrates that the employees were trained on the job
code policy inconsistently. While some employees like Plaintiff Bishop received training on this
unwritten policy, others like Plaintiff Pender had to be corrected on the job because she did not
receive training on when to select a particular job code initially. Tr. 54:15–25; 236:7–22. Bishop
was also trained that for any side work that took more than 20 minutes, she could clock in under
the meeting code for the duration of that task. Tr. 284:2–6. Notably, however, the evidence
2 “Outs” consisted of stocking the server station, taking out trash, sweeping serving sections, cleaning tables and
chairs, and any other duties to be completed before completing a shift. Tr. 78:22–25; 79–81.
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presented at trial does not support that this unwritten policy was reinforced by managers or
followed consistently. For example, management observed servers washing dishes, taking out
trash, and performing other side work tasks while they were supposed to be serving tables, yet did
not inquire about the code under which the work was being completed. Tr. 198:22–25; 199:1–2;
305:5–25; 306:1–9. Further, Pender was never disciplined for performing these side tasks under
the server code. Tr. 55:3–5.
Despite maintaining an unwritten policy on job codes, this policy was not enforced in
practice. Oftentimes managers did not assist servers with the clock out process, and as a result, the
employees performed outs, closing duties, and other side work under the server, subminimum
wage code. Tr. 85:4–23. At times, employees waited for up to forty-five minutes before a manager
would help them switch to the meeting code to perform outs and closing duties. Id.; 87:6–24; 274–
275. As a result, the Plaintiffs frequently completed these tasks under the server job code. Tr. 85:4–
9.
Defendants also maintained a policy that allowed employees to edit POS system time
entries to correct clock in time or job codes. Under this policy, employees could adjust the code
for work performed under the server code to the meeting code by submitting a form. Tr. 357:21–
25; 358:1–25; 359:1–9; Jt. Ex. 150.
E. Side Work
1. 	Outs
After each opening shift, servers were required to complete their “outs” before leaving for
the day. Tr. 80:17–20. Outs consisted of section specific tasks listed on a checklist such as
sweeping the floor, cleaning tables, cleaning the garbage can, cleaning the sink, cleaning tea urns,
filling ice, wiping the cupboards, and stocking the server station with condiments, napkins, and
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wet wipes. Tr. 78:22-25; 79:1–4; 83:2–13; 89–92. Specifically, Pender estimated cleaning the
garbage can took between five to ten minutes, filling ice took between five to six minutes, taking
out trash took between three to five minutes, sweeping the floor of a serving section could take
between five to ten minutes, cleaning the sink took about three minutes, cleaning tea urns took
between five to ten minutes, and wiping cupboards took about three to five minutes. See generally
Tr. 89–95. On average, Pender completed her outs in thirty to forty-five minutes when working in
main dining. Tr. 87:9–14. She additionally estimated that about eighty percent of the time, she
completed her outs under the server code due to the length of time it typically took for a manager
to help her switch to the meeting code. Tr. 85:4–23.
2. 	Rolling Silverware
Pender also testified that servers frequently rolled silverware throughout their shifts. Tr.
104:24–25; 105:1–12. Servers would roll anywhere between five to twenty silverware sets at a
time and repeated the process five to ten times a shift. Tr. 105:14–25; 106:1–12. Post-COVID,
the process took up slightly less time. Tr. 195:2-9.
3. 	Closing Duties
After each closing shift, servers were expected to complete closing duties. Pender
estimated these duties took on average an hour to an hour and a half. Tr. 112:18–22. Typically,
Pender would start her closing duties an hour before the end of her shift depending on how busy
the restaurant was. Tr. 113:5–12. Closing servers were expected to mop floors and double-check
everything. Tr. 111:21-25; 112:1–3. Closing servers were also expected to answer the phones for
takeout orders and restock the server stations. Tr. 114: 4–15. Pender attested that about forty
percent of her shifts were closing shifts and a majority of the time she performed these tasks under
the server job code. Tr. 112:8–17.
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4. 	Shift Change Duties
At the start of a midday shift, servers were expected to complete shift change duties which
consisted of stocking the server station, making tea, preparing lemons and limes, sweeping
sections, cleaning tables, running food, and running dishes to the back. Tr. 132:3–25. Servers
mostly performed these tasks under the server code. Often at the start of a midday shift, servers
were immediately given tables and thus needed to begin serving and completing shift change duties
simultaneously. Tr. 134:1–25; 135:1–4. Shift change duties typically took twenty to thirty minutes.
Tr. 136:3–7.
5. 	Expo Work
Often servers were also expected to complete expo work. Expo work entailed checking
orders, placing the food on trays, and then setting the tray in the expedite window so a server could
pick up the order and deliver it to the appropriate table. Tr. 117:11–22. Typically, there was one
expo person per shift. Post-COVID, however, there were not enough expos to cover all shifts. Tr.
117:19–25; 118:1–3. As a result, servers would cover the expo role while actively serving tables.
Pender estimated that during two out of her four or five shifts per week there was not an expo
person working. Tr. 118:4–13. Thus, when acting as an expo during her server shifts, Pender was
typically clocked in under the server job code. Tr. 119:3–5. During these shifts where no expo was
staffed, Pender acted as an expo whenever she was not at a table or doing a side job. Tr. 118:14–
17.
6. 	Dishwashing
Servers were also expected to do dishwasher duties throughout the entirety of their shifts.
Tr. 119:14-16. Post-COVID, the dishwasher position was not staffed and servers frequently picked
up the slack. Tr. 144:1–3; 145:7–18; 262:1–3. Pender recalls that Ben Omaits directed servers to
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assist with dishes any time they were in the back kitchen. Tr. 145:14-25; 146:1–4. Mr. Beltran
affirmed that due to the lack of dishwashers, servers were responsible for cleaning the dishes. Tr.
331:3–5; 332: 14–17. Due to performing dishwashing duties while actively assigned tables, servers
completed these duties under the server job code. Tr. 146:5–7. Pender further recalled that she and
the other servers spent nearly as much time in the back of the house washing dishes as they were
out front serving tables. She estimates that roughly forty percent of a given shift consisted of
dishwashing. Tr. 146:8–25. Bishop recounted that washing dishes could take up a quarter of her
time during any given shift, or longer if the restaurant was busy. Tr. 263:17-25; 264:1-25; 265:4–
25; 266:1–13.
7. 	Janitorial Work
During any closing shift, servers were expected to clean bathrooms. Tr. 136:8–15; 271:2–
4. This usually occurred once all customers were out of the store and consisted of mopping and
wiping down surfaces. Tr. 137:2–21. Pender estimated cleaning the bathroom took her about five
to ten minutes, and she was occasionally clocked in under server, but mostly under the meeting
job code. Tr.137:2–11. The restaurant did not employ janitors. Tr. 137:22–25; 138:1–3.
F. 	Individual Defendants
Both Defendants Scott Lloyd and Stephon Green had ownership interests in the restaurants
at issue—Lloyd with two, and Green with all four establishments. Tr. 402:2–14; 499:10–25;
500:1–6. They also were both involved in making decisions about promoting high-level managers
such as regional managers at the store level. Tr. 431–433; 507:22–24. As for general managers,
Lloyd and Green delegated the authority to interview and hire general managers to Chris Beltran,
although Beltran would occasionally discuss such decisions with Green. Tr. 506:17–25; 507:1–24.
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Green attests that he did not promote any general managers himself between 2018 and 2022. Tr.
507:16–21.
Both Green and Lloyd had access to the corporate credit card and had oversight into
purchases. Tr. 433:6–20. Additionally, Lloyd began serving as a human resources consultant for
the St. Clairsville restaurant in 2023. Tr. 452:9–14. Green, however, acted as the “control person”
or liaison between corporate and the franchise for the St. Clairsville, Moundsville, and Parkersburg
locations. Tr. 419:14–25. As the control person, Green promoted regional managers, ensured
managers attended trainings, set menu pricing, attended annual franchise conferences, and was
involved in marketing. Tr. 517:21–25; 518:1–8. Lloyd and Green did not interview, hire, train,
fire, discipline, make personnel decisions, set the schedules, wages, or job duties for servers and
bartenders. Tr. 484–486; 531–532.
III. 	CONCLUSIONS OF LAW
A. Tip Credit Notice
Under the FLSA, employers may receive a tip credit allowing them to pay tipped
employees less than the federal minimum wage so long as the wage paid, when combined with the
tips earned by the employee, meets or exceeds the federal minimum wage. Morse V. Fifty West
Brewing Company LLC, 2026 WL 872495, at *10 (S.D. Ohio Mar. 30, 2026) (citing 29 U.S.C.
203(m)(2)(A)). Importantly, an employer is required to inform an employee of the FLSA
requirements prior to paying her pursuant to such provisions. 29 U.S.C. 203(m)(2)(A); see also
Waters v. Pizza to You, LLC, 538 F. Supp. 3d 785, 795 (S.D. Ohio Feb. 9, 2021) (“The Fair Labor
Standards Act’s remedial goals are defeated if employees have no way of knowing whether they
are being paid properly.”); Crowell v. M St. Ent., LLC, 670 F. Supp. 3d 563, 592 (M.D. Tenn. 2023)
(reasoning that failure to notify employees of the FLSA tip credit provisions triggers a minimum
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wage violation and results in forfeiture of the tip credit.). In 2011, the Department of Labor issued
regulation, 29 C.F.R. § 531.59(b), requiring employees to be informed of the following:
(1) the amount of the employee’s cash wage, (2) the amount of the tip credit claimed
by the employer, (3) that the amount claimed may not exceed the value of the tips
actually received, (4) that all tips received must be retained by the employee, except
that “the pooling of tips among employees who customarily and regularly receive
tips” is permitted, and (5) that the tip credit shall not apply to any employee who
has not been informed of all of these requirements.
Crowell, 670 F. Supp. 3d at 581 (citing 29 U.S.C. § 203(m)(2); 29 C.F.R. § 531.59(b)). Notably,
however, while other courts have deferred to § 531.59(b), the Sixth Circuit has not yet considered
these specific requirements. Id. (citing Galleher v. Artisanal, LLC, 2021 WL 243868, at *6
(W.D.N.C. Jan. 25, 2021); Driver v. AppleIllinois, LLC, 917 F. Supp. 2d 793, 801–02 (N.D. Ill.
2013); Nat'l Rest. Ass'n v. Solis, 870 F. Supp. 2d 42, 54 (D.D.C. 2012)). The Sixth Circuit has held
that at a minimum, the employer must ensure the employee is “informed” that the employer
“intends to treat tips as satisfying part of the employer’s minimum wage obligation” but need not
“explain” the tip credit. Kilgore v. Outback Steakhouse of Fla., Inc., 160 F.3d 294, 298 (6th Cir.
1998); Solis v. Min Fang Yang, 345 F. App’x 35, 38 (6th Cir. 2009); McFarlin v. Word Enters.,
2018 WL 1410827, at *2 (E.D. Mich. Mar. 21, 2018). This Court finds that regardless of whether
Defendants’ actions are evaluated under § 531.59(b), or the Sixth Circuit’s standards espoused in
Kilgore, Defendants have failed to provide notice of the tip credit in compliance with the FLSA.
Here, Defendants contend that during the relevant time period employees were provided notice
that Defendants intended to treat tips as a satisfying component of the minimum wage requirement
via: (1) oral notice; (2) written notice in the employee handbook; and (3) posters displayed on site.
(ECF No. 189 at 28–29). Additionally, Defendants argue that in November 2021, Defendants
began using a written tip credit form that provided notice in compliance with the FLSA from that
point on. Id. at 27. In opposition, Plaintiffs argue that Defendants were required to inform
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employees of the five requirements listed by the Department of Labor in 29 C.F.R. § 531.59(b) yet
failed to do so. (ECF No. 190 at 19).
First, looking to the five requirements of § 531.59(b), despite Chris Beltran testifying that the
employees were informed of these requirements, there is no evidence that Defendants informed
Pender or Bishop that the amount of a tip credit claimed may not exceed the value of the tips
actually received, that they were to retain all tips themselves, or that that the tip credit shall not
apply to any employee who has not been informed of all of these requirements. Further, Beltran
admits that he was not present for the interviews or orientations of either Bishop or Pender.
Accordingly, there is no evidence that the policy of informing employees of all the requirements
in § 531.59(b) occurred in practice.
Next, this Court evaluates whether Defendants provided sufficient notice pursuant to the Sixth
Circuit’s standards. As discussed in this Court’s summary judgment opinion on this matter, the
posters and oral statements alone may be insufficient, although each may be relevant for providing
adequate notice if provided along with other forms of notice. (ECF No. 122 at 18). Employers may
inform employees of the tip credit orally, in writing, or through a combination of sources. See
Schaefer v. Walker Bros. Enters., 829 F.3d 551, 558 (7th Cir. 2016); Pellon v. Bus. Representation
Int'l, Inc., 528 F. Supp. 2d 1306, 1311–1312 (S.D. Fla. 2007), aff'd, 291 F. App’x 310 (11th Cir.
2008).
At trial, Defendants offered evidence confirming that Department of Labor posters were
prominently displayed in each restaurant. Pender confirmed that she was aware of these posters
yet admitted to never reading them and only knew they said “the law” at the top. Additionally,
Chris Beltran testified that these posters were used to explain the tip credit and managers were
trained to show these posters to new employees. As for the employee handbook notice, despite the
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handbook containing a provision stating that “[e]mployees who receive tip income will be
provided a written policy statement regarding any applicable policy on mandatory tip pooling or
use of the tip credit to satisfy the minimum wage obligation,” Defendants provided no evidence of
any such written policy in existence before November 2021. Finally, Beltran also testified that he
trained managers to inform new hires orally that as tipped employees, they could keep 100% of
their tips, and that if they did not earn enough tips to satisfy minimum wage, their tips would be
supplemented. While Bishop confirmed she was told about receiving a subminimum wage, and
that she would get tips, Pender testified that the tip credit provisions were never explained to her.
In Schaefer v. Walker Bros. Enterprises, the employer provided a document notice stating “Tip
Credit. I understand that a portion of the wages I receive are from tips. The Company can apply a
credit to the minimum wage to include those tips as wages. The tip credit in Illinois is 40% of
minimum wage.” Id. at 557. The Schaefer court found that this handout in combination with DOL
posters provided sufficient notice. Id. at 558. Similarly, in Kilgore, the employer provided a file to
the plaintiff stating “I understand that the practice of sharing tips among tipped employees is
approved by Outback Steakhouse. Further, I understand that tips will be used as a credit against
the minimum wage as permitted by federal and/or state law.” Kilgore, 160 F.3d at 299. The Kilgore
court found that providing this provision to the plaintiff provided sufficient notice even where the
employee denied being directed to read the provision. Id. at 299–300.
Here, the posters do not expressly indicate that Defendants intended to treat tips as satisfying
part of their minimum wage obligations. The West Virginia poster indicated that employers are
allowed to make a choice to claim a tip credit and if so, what the law requires. D. Ex. 89. Similarly,
the Ohio poster defined tipped employees and explains what employers must do when electing to
use the tip credit. D. Ex. 8. Neither poster, however, indicated that the employer intended to use
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the tip credit. The posters alone are insufficient, as nothing indicated how these posters apply to
Plaintiffs. Further, the handbook notice was nowhere near as specific as those offered in Kilgore
and Schaefer. Most notably, Plaintiffs were never provided with a written acknowledgment form
as promised in the handbook. Accordingly, Plaintiffs never signed an acknowledgment or received
an individual handout like the plaintiffs in Kilgore and Schaefer. The information provided to
Plaintiffs via the posters and the handbook were not offered in a decipherable context for an
employee to understand that the employer intended to treat tips as satisfying part of the employer’s
minimum wage obligation.
In summary, neither the posters nor the employee handbook explicitly communicated
Defendants’ intent to use the tip credit, and there is not conclusive evidence that employees were
told about the tip credit. Both Pender and Bishop confirmed that managers did not explain that
Defendants intended to use tips to satisfy their minimum wage obligations and the FLSA.
Accordingly, this Court finds that Defendants failed to provide sufficient notice of the tip credit
prior to 2021. As mentioned in this Court’s summary judgment opinion, however, Defendants
began providing notice via written tip credit acknowledgment forms which were signed by
employees. Accordingly, all employees who signed a tip credit notice form are not entitled to any
damages for violations of the FLSA tip credit notice requirement.
B. Side Work
1. 	Unrelated Work
Plaintiffs additionally claim that they were paid a subminimum hourly wage in violation of
FLSA while performing: (1) non-tipped work that is unrelated to their jobs as servers and
bartenders; and (2) non-tipped work related to the tipped work that exceeded 20% of their time.
(ECF No. 42 ¶ 91). Plaintiffs contend that the evidence adduced at trial demonstrated Plaintiffs
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were often engaged in unrelated tasks such as dishwashing, cleaning bathrooms, and acting as an
expo while serving or bartending. (ECF No. 190 at 24). Defendants, however, argue that Plaintiffs
were paid adequately under both scenarios and any inconsistencies can be attributed to Plaintiffs’
own non-compliance with Defendants’ policies. (ECF No. 189 at 24–25).
As discussed in this Court’s summary judgement opinion, the Dual Jobs Regulation requires
the court to analyze whether an employee’s untipped duties are “related” to their tipped occupation,
as well as the frequency with which those duties are performed. Harding, 745 F. Supp. 3d at 588
(citing Harrison v. Rockne's Inc., 274 F. Supp. 3d 706, 710 (N.D. Ohio 2017). Courts have found
that unrelated duties consist of tasks such as dishwashing, operating the grill, cleaning bathrooms,
acting as a hostess, taking out the trash, and operating the phones. Id. (citing O'Neal v. Denn-Ohio,
2020 WL 210801, at *8–9 (N.D. Ohio Jan. 14, 2020)).
In order to meet the burden of their side work claims, Plaintiffs must: (1) prove they have
performed work for which they were improperly compensated; and (2) produce evidence showing
the amount and extent of the work performed as a matter of “just and reasonable inference.”
Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687–688 (1946). As to how often these tasks
were performed “[p]laintiffs are required to show ‘more than de minimis claims based on seconds
or minutes spent’ performing unrelated tasks.” Harding, 745 F. Supp. 3d at 588.
At trial Pender and Bishop testified that during shifts they were frequently expected to
perform unrelated tasks such as dishwashing, sweeping, taking out trash, and acting as an
expediter. Defendants do not dispute that Plaintiffs were frequently expected to perform these
tasks. In fact, Plaintiffs produced evidence that post-COVID, the restaurants failed to staff
dishwashers, so servers were the ones washing all the dishes and spent nearly as much time
washing dishes as they did serving tables. Similarly, the expediter position was not staffed properly
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and therefore servers spent a large amount of time in the expo role while simultaneously serving
tables. Additionally, each shift, servers were expected to perform outs and closing duties which
could take anywhere from thirty minutes to an hour and a half depending on the day. These outs
and closing duties were listed on a checklist and servers were expected to complete them each day.
Defendants offer no evidence to refute that Plaintiffs were frequently required to do this unrelated
work. Accordingly, Plaintiffs have satisfied their burden of demonstrating that they performed
tasks unrelated to serving.
While Defendants do not dispute that servers were expected to and did this unrelated work
on a regular basis, Defendants assert that the restaurants maintained policies that compensated this
work appropriately. Chris Beltran testified it was restaurant policy that when performing outs and
closing duties servers were instructed to clock in under the meeting job code to ensure their work
was compensated at minimum wage. Further, he testified that servers were instructed to use the
meting code for any side work that was expected to take more than twenty minutes during their
shifts. Plaintiff Bishop affirmed that she was aware of the twenty-minute side work policy. Further,
both Pender and Bishop were aware that servers were to clock in under the meeting code at the
start of a shift, when performing outs, shift change, and closing duties. In fact, at trial Plaintiffs
testified that sometimes the servers did clock in under meeting when performing these unrelated
tasks. Notably, however, this policy was not enforced or consistently workable. Given that servers
were not able independently to switch their job code from server to meeting, servers were often
left with no choice but to complete these tasks under the server code and receive a subminimum
wage. It is not dispositive that sometimes Plaintiffs completed these unrelated tasks under the
meeting code and received minimum wage. See, e.g., Harding, 745 F. Supp. at 589 (“To be sure,
the record also shows that at some, though not all, times Plaintiffs were paid the full minimum
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wage for time spent performing unrelated work. … However, these instances of proper
compensation do not excuse the periods where Plaintiffs were not fully compensated for purposes
of Steak N Shake’s liability under the FLSA.”). This is especially true given the fact that servers,
due to short staffing, were often dishwashing and acting as expediters while actively waiting on
tables.
Defendants presented no evidence that management reinforced the importance of the meeting
code or consistently facilitated Plaintiffs switching to the meeting code when necessary. Further,
Defendants failed to refute the testimony of Plaintiffs that management was aware that Plaintiffs
were frequently doing side work under the server code. Although case law supports that no FLSA
violation has occurred when an employer establishes a “reasonable process” for an employee to
report uncompensated work, Defendants process was not reasonable. Cf. White v. Baptist Mem'l
Health Care Corp., 699 F.3d 869, 876 (6th Cir. 2012) (finding no FLSA violation where Plaintiff
had a reasonable process to report time spent performing work during her lunch break via an
“exception log”). In White v. Baptist Mem’l Health Care Corp., the plaintiff only complained of
performing uncompensated work during lunch breaks, whereas here, the issue was far more
pervasive throughout Plaintiffs’ entire shifts. Id. Further, Plaintiffs could not carry out the time
reporting process without the help of management who eighty percent of the time did not assist
them in switching job codes. Even the fact that the restaurants had time correction sheets does not
defeat Plaintiffs’ claims. Plaintiffs demonstrated that on a daily basis they were expected to
complete a large amount of unrelated side work. A system that requires Plaintiffs to keep track
manually of how long they engaged in unrelated tasks and then fill out a correction form after each
shift is neither workable nor reasonable. Accordingly, Defendants have failed to refute that their
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policies ensured Plaintiffs received minimum wage for unrelated side work in practice. Plaintiffs
sufficiently established that they were inappropriately compensated for unrelated work.
Finally, Plaintiffs must produce evidence showing that the amount and extent of the unrelated
work performed equates to more than de minimis claims. As mentioned above, Plaintiffs testified
that these unrelated tasks were performed each day during shifts, shift changes, and closing. These
tasks were more than the occasional one off. Due to short staffing, servers and bartenders were
expected to wash dishes and expedite food consistently while they were serving tables. Outs often
took forty-five minutes, shift change duties averaged twenty to thirty minutes, closing duties could
take up to an hour and a half, cleaning bathrooms could take five to ten minutes, and dishwashing
and expo work was required throughout the shifts post-COVID. All these tasks demonstrate that
there was continuous practice of Plaintiffs performing unrelated side work. This work amounted
to more than seconds or minutes, but often times equated to hours during Plaintiffs’ shifts satisfying
the FLSA violation threshold. See Harding, 745 F. Supp. at 588–589 (finding more than de minimis
claims where plaintiffs unrelated tasks were more than an “occasional request” but rather
demonstrated a continuous practice of tasks that could take between fifteen minutes to an hour).
2. 	Related/Tip-Supporting Work
Next, Plaintiffs needed to adduce evidence at trial demonstrating that Defendants paid
Plaintiffs subminimum hourly wages to perform non-tipped work which, although related to
Plaintiffs’ tipped occupation, exceeded twenty percent (20%) of their time worked during each
workweek. Defendants argue that Plaintiffs’ side work claims must fail due to Plaintiffs’ failure to
differentiate between time spent on tipped work, related non-tipped work, and unrelated non-tipped
work. This Court disagrees.
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First, Defendants assert Plaintiffs may not prevail given their failure to distinguish between
related non-tipped work, and unrelated non-tipped work. In Harding v. Steak N Shake, the court
denied summary judgment on plaintiff’s related tip supporting claims where plaintiffs provided
only general estimates. 745 F. Supp. at 590. Specifically, one plaintiff testified that she spent 40-
50% her shifts “doing things other than the serving duties” and another testified that she spent
between 20-40% of her shift doing “side work.” Id. The court reasoned that “[b]y using the terms
‘things other than the serving duties’ and ‘side work’ to describe these tasks, [p]laintiffs’ testimony
fails to differentiate between time they spent performing unrelated work (like working the grill or
cleaning bathrooms) and time spent performing tip-supporting work (like rolling silverware or
cleaning up spills).” Id. at 590–591. Thus, the court’s holding was primarily focused on the fact
that the Harding plaintiffs failed to provide estimates as to how long they performed these tasks
with specificity, as opposed to general statements about the tip-supporting tasks combined.
Additionally, the Harding court did not dispute that “cleaning and setting tables, making tea and
coffee, rolling and stocking silverware, stocking and refilling condiments, cleaning booths and the
dining area, stocking paper supplies and drinks, mopping spills, and cleaning the dining area”
consisted of tip-supporting work. Id. at 590.
Unlike in Harding, Pender and Bishop’s testimony provided time estimates for each task as
outlined above as opposed to more generally stating that the servers spent twenty percent of their
time on related but non-tip supporting duties. Further, it is not dispositive that Plaintiffs did not
state that each task was tip supporting/related or unrelated. This Court is well equipped to make
such determinations. As the Harding Court reasoned, tasks such as rolling and stocking silverware,
making tea and cleaning the tea station, stocking and refilling condiments, cleaning booths and the
dining area are all tip-supporting work, and Plaintiffs offered testimony regarding how long it took
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them to complete such tasks. Thus, this Court disagrees that Plaintiffs have failed to differentiate
between related/tip-supporting and unrelated side work.
Additionally, pursuant to Anderson v. Mt. Clemens Pottery Co., after a plaintiff has met her
burden, the burden shifts to the employer “to come forward with evidence of the precise amount
of work performed or with evidence to negative the reasonableness of the inference to be drawn
from the employee’s evidence.” 328 U.S. at 687–688. The Supreme Court reasoned that “the
employer cannot be heard to complain that the damages lack the exactness and precision of
measurement that would be possible had he kept records in accordance with the requirements….”
Id. at 688. Accordingly, an employee “nonetheless satisfies her burden if she ‘proves that [she] has
in fact performed work for which [she] was improperly compensated and if [she] produces
sufficient evidence to show the amount and extent of that work as a matter of just and reasonable
inference.” Rafferty v. Denny's, Inc., 13 F.4th 1166, 1191 (11th Cir. 2021). If an employer fails to
meet its burden, the plaintiff is entitled to damages even if the award is an estimation. Id.
Here, as discussed above, Plaintiffs have met their burden through providing detailed
testimony regarding the related/tip-supporting side work duties they were expected to do and how
often they were engaged in these duties. Looking at Pender’s testimony of rolling silverware alone,
she estimated she spent five to ten minutes rolling silverware at least five to ten times a shift. See
id. (finding plaintiff produced sufficient evidence by testifying the related duties took twenty-five
to thirty minutes each shift). As such, it is not dispositive that Plaintiffs have not adduced highly
specific evidence regarding how much time was spent on their non-tipped related duties. Id. at
1192 (reasoning that the employee need not pinpoint when her related duties exceeded twenty
percent of the hours she worked and opining that the employer must negate the inferences “that
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she worked more than twenty percent of her time in related duties at least some of the time she
was employed.”).
Further, Defendants failed to produce convincing evidence that negated the reasonable
inference from Plaintiffs’ testimony that they spent more than twenty percent of their time on
related duties. Defendants’ entire defense hinges on the fact that Plaintiffs failed to follow the job
code policies implemented by the restaurants. Notably, however, Defendants failed to refute
Plaintiffs’ testimony that their policies were not carried out or workable in practice. Thus, the time
records produced by Plaintiffs can be relied on as accurate representations of Plaintiffs’ time spent
on subminimum wage versus minimum wage tasks. Accordingly, it is reasonable for this Court to
award Plaintiffs damages based on estimations for both their related and unrelated non-tipped
duties.
C. Inappropriate Expenses
Plaintiffs also allege that they were required to pay for uniforms, shirts, server books, walked
tabs, copies of payroll documents, and other items and expenses in connection with performing
their jobs for Defendants. (ECF No. 42 ¶¶ 60, 95). Plaintiffs assert that this invalidates the
Defendants’ claim to a tip credit under the FLSA because: (1) if these expenses were paid out of
Plaintiffs’ subminimum hourly wage, then their wages fell below the minimum required under the
FLSA; or (2) if paid from their tips, then Plaintiffs did not retain all of their tips as required under
the statute. See, e.g., 29 U.S.C. § 203(m) (“[A]ll tips received by such employee [must be] retained
by the employee.”).
Employee expenses may invalidate the tip credit if those expenses reduce employee
compensation below the minimum wage. See, e.g., Pedigo v. Austin Rumba, Inc., 722 F. Supp. 2d
714, 721 (W.D. Tex. 2010) (finding employer took improper uniform deductions from the
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paychecks of its servers, which effectively reduced servers’ and bartenders’ wages below the
minimum wage). At trial, Plaintiffs testified that Defendants provided Plaintiffs with aprons, name
tags, and server books. Plaintiffs further testified that Defendants never deducted the cost of any
uniform shirts, nonslip shoes, or dark pants from Plaintiffs’ paychecks. If Plaintiffs desired to buy
extra shirts or server books, they could do so out of pocket. Despite Plaintiffs testimony that they
made these purchases, Bishop purchased only one extra server book and Pender attested to buying
a couple additional shirts over the years. This evidence is not sufficient to indicate that such
expenses dropped Plaintiffs below the minimum wage. Additionally, Plaintiffs presented no
evidence that employees had to pay for a walkout, a shortage, a mistaken order, or breakage.
Therefore, Plaintiffs are not entitled to judgment against Defendants for inappropriate business
expenses.
D. Individual Defendants
Under the FLSA, an “employer” is defined as “any person acting directly or indirectly in
the interest of an employer in relation to an employee . . .” 29 U.S.C. § 203(d). The Sixth Circuit
has recognized that the statute “contemplates there being several simultaneous employers who
may be responsible for compliance with the FLSA.” Dole v. Elliott Travel & Tours, Inc., 942 F.2d
962, 965 (6th Cir. 1991). In addition, “[t]he remedial purposes of the FLSA require the courts to
define ‘employer’ more broadly than the term would be interpreted in traditional common law
applications.” Dole, 942 F.2d at 965 (internal quotation marks and citation omitted). More
specifically, “[i]n deciding whether a party is an employer, ‘economic reality’ controls rather than
common law concepts of agency.” Id. at 965 (citation omitted).
Importantly, a “corporate officer who has operational control of the corporation’s covered
enterprise is an ‘employer’ under FLSA, along with the corporation itself.” U.S. Dep't of Lab. v.
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Cole Enters., Inc., 62 F.3d 775, 778 (6th Cir. 1995). An employer may be “[o]ne who is the chief
executive officer of a corporation, has a significant ownership interest in it, controls significant
functions of the business, and determines salaries and makes hiring decisions . . . .” Id. It is also
well-established that “[w]hether a party is an employer within the meaning of the FLSA is a legal
determination.” Dole, 942 F.2d at 965. The Crowell court concluded:
[i]n short, “[a] person exercises operational control over employees if his or her role within
the company, and the decisions it entails, directly affect the nature or conditions of the
employees’ employment.” This “does not mean that the individual ‘employer’ must be
responsible for managing plaintiff employees—or, indeed, that he or she must have directly
come into contact with the plaintiffs, their workplaces, or their schedules.” However, “the
relationship between the individual’s operational function and the plaintiffs’ employment
must be closer in degree than simple but-for causation.”
Crowell, 670 F. Supp. 3d at 578 (cleaned up).
In Dole v. Elliott Travel & Tours, Inc., the Sixth Circuit, using the economic realities test,
reasoned that the defendant was an employer under the FLSA where the defendant delegated some
responsibilities such as bookkeeping, tracking overtime, and day-to-day problems to managerial
staff, yet still acted as the chief corporate officer and determined employee salaries. Id. at 966. The
Sixth Circuit opined that it was not required that defendant had exclusive control of the day-to-day
functions of the corporation, but rather it was sufficient that the evidence revealed the defendant
“controlled the purse strings of the operation” and was the was the “top man” at the corporation
which functioned for his profit. Id.
Herman v. RSR Sec. Services Ltd., is also instructive. There, the trial court applied the
economic realities test and evaluated whether the defendant: “(1) had the power to hire and fire
the employees, (2) supervised and controlled employee work schedules or conditions of
employment, (3) determined the rate and method of payment, and (4) maintained employment
records.” Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132, 139 (2d Cir. 1999) (internal quotation
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marks and citations omitted). The court reasoned that because the defendant hired managerial staff
who oversaw the plaintiffs, there was a strong indicator of control. Id. at 140. Further, on occasion,
defendant controlled the employee schedules. As to determining rates and methods of payment,
the defendant did not determine the rate of payment but signed paychecks. Finally, the defendant
did not maintain employment records which the trial court noted was not dispositive. Thus, the
trial court deemed the defendant an employer under the FLSA. The Second Circuit later upheld
the trial court’s determination noting that the totality of the circumstances was relevant in
determining defendant’s operational control over the corporation. Id. at 141.
Here, this Court finds that Plaintiffs have failed to demonstrate that Green and Lloyd are
employers under the FLSA. First, while Green and Lloyd were never involved in the hiring or
firing of employees, they were both involved in the promoting of Chris Beltran to the regional
manager position. Green was also involved in the promotion of general manager, Ben Omaits. This
factor militates towards a finding of operational control given that Beltran and Omaits had direct
control over the servers and bartenders. Id. at 140; Donovan v. Grim Hotel Co., 747 F.2d 966, 972
(5th Cir.1984) (finding operational control where the defendant “personally selected the manager
of every hotel.”). Second, unlike the defendants in Dole and Herman, Green and Lloyd did not set
employee salaries or sign their paychecks. Further, there is no evidence that Green and Lloyd
influenced the employee work schedules or maintained work schedules.
In sum, despite Green and Lloyd demonstrating operational control over general and regional
managers, there is no indication that the individual defendants “held the purse strings,” set
employee compensation, engaged in employee training, or set up employment policies for the
restaurants. See, e.g., Miller v. Food Concepts Int'l, LP, 2017 WL 1163850, at *28 (S.D. Ohio Mar.
29, 2017) (finding the individual defendants not employers under the FLSA and reasoning that
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“[p]laintiffs’ economic dependence is on Abuelo’s, not on DelVecchio or Myers. In other words,
no money comes out of the pockets of DelVecchio or Myers to pay Plaintiffs. The terms and
conditions of Plaintiffs’ work are laid out in the employee handbook, which is not alterable by
DelVecchio or Myers. … [Further,] DelVecchio, but not Myers, has the authority to hire or fire
Plaintiffs. Finally, neither DelVecchio nor Myers establishes the rate and method of paying
Plaintiffs, though they may maintain Plaintiffs’ employment records.”); Cf. Donovan, 747 F.2d at
972 (finding defendant was an employer under the FLSA where he traveled to inspect hotels,
solved major problems, and selected all managers); Crowell, 670 F. Supp. 3d at 579 (defendant
was an employer under the FLSA where plaintiffs indirectly reported to him through senior
management, he set compensation, and trained front of the house employees); Benion v. LeCom,
Inc., 336 F. Supp. 3d 829, 856 (E.D. Mich. 2018) (individual defendant was an employer under
the FLSA where defendant held weekly meetings with management to discuss performance of
employees, and was solely responsible for hiring, firing, compensation, and coordinating
subcontractors). Accordingly, Plaintiffs have failed to establish that Lloyd and Green individually
are employers under the FLSA as a matter of law.
E. Willfulness
Under the FLSA, the statute of limitations for a violation is two years. 29 U.S.C. § 255(a). If
Plaintiffs demonstrate a willful violation of FLSA occurred, however, the statute of limitations is
extended to three years. Id.; Hendricks v. Total Quality Logistics, LLC, 694 F. Supp. 3d 1005, 1036
(S.D. Ohio 2023). To prove a willful violation, plaintiffs bear the burden to “demonstrate ‘that the
employer either knew or showed reckless disregard for the matter of whether its conduct was
prohibited by the statute.’” Id. (citing McLaughlin v. Richland Shoe Co., 486 U.S. 128, 129
(1988)). “This standard requires more than a showing of negligence on the employer’s part. …
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Even if an employer acts unreasonably, but not recklessly, in determining its legal obligation under
the FLSA, its conduct does not satisfy the ‘willfulness’ standard.” Schneider v. City of Springfield,
102 F. Supp. 2d 827, 836 (S.D. Ohio 1999). The Sixth Circuit has found that an employer acted
willfully where he “had actual notice of the requirements of the FLSA by virtue of earlier
violations, [made an] agreement to pay unpaid overtime wages, and [assured] future compliance
with the FLSA.” Dole, 942 F.2d at 967.
In Crowell, for example, the court found that the employer was not entitled to summary
judgment on the issue of willfulness where the employer had been named in a prior lawsuit which
put the employer on notice of specific potential violations of the FLSA. Crowell, 670 F. Supp. 3d
at 602. Similarly in Hendricks v. Total Quality Logistics, LLC, the employer had knowledge of a
similar lawsuit against its competitor and had been subject to two investigations conducted by the
Wage and Hour Division of the U.S. Department of Labor regarding the alleged FLSA violations
which the court reasoned put the employer on notice. 694 F. Supp. 3d at 1037–1038. Notably, the
court found no willful violation for that specific lawsuit only, given the investigations and other
lawsuits were initiated after the initiation of that lawsuit. Id. at 1038.
Here, Plaintiffs have not adduced evidence of prior investigations or lawsuits that would have
put defendants on notice of potential FLSA violations. Instead, Plaintiffs contend Defendants acted
willfully because: (1) Defendants failed to ensure Plaintiffs were paid minimum wage for non-
tipped work; and (2) Defendants’ handbook confirms they knew about but ignored the tip credit
notice requirement. This Court disagrees. The evidence presented at trial demonstrates that
Defendants had taken various steps towards compliance with the tip credit notice requirement.
Defendants posted posters, indicated in the handbook that employees were to receive a written
notice regarding the tip credit, and managers were to discuss the tip credit orally with new
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employees. Despite such, these policies were not enforced consistently, and this Court finds that
Defendants failed to comply with the FLSA notice requirement. Even given this finding, however,
the failure of Defendants to ensure managers were actually providing tip credit notice via written
notice or orally communicating this to new employees is more akin to negligence. Most damaging
to Plaintiffs’ assertion of willfulness is that the evidence presented by Plaintiffs is not similar to
the type of evidence present in prior cases where willfulness has been found. See Stultz v. J.B. Hunt
Transp., Inc., 35 F. Supp. 3d 866, 879 (E.D. Mich. 2014) (collecting cases finding willfulness
where employers had notice via prior investigations and violations). Therefore, there is inadequate
evidence of willfulness here and the statute of limitations is limited to two years under both the
FLSA and Ohio law.3
F. 	Good Faith
“The FLSA provides that liquidated damages be awarded for FLSA violations in an amount
equal to the actual damages, 29 U.S.C. § 216(b), but a court may in its discretion refuse to award
these liquidated damages ‘if the employer demonstrates good faith and reasonable grounds for
believing it was not in violation.’” Hendricks, 694 F. Supp. 3d at 1038. The employer’s burden is
substantial and requires a showing that it took “affirmative steps to ascertain the Act’s
requirements, but nonetheless violated its provisions.” Id. (quoting Martin v. Indiana Michigan
Power Co., 381 F.3d 574, 584 (6th Cir. 2004)). Further, willfulness and good faith are two different
standards, and a finding that an employer did not act willfully does does not bar a finding that the
employer did not act in good faith. Id.
3 “Unlike the FLSA, Ohio law does not provide for an extension of this statutory period in the case of a willful
violation by the employer.” Viciedo v. New Horizons Computer Learning Ctr. of Columbus, Ltd., 246 F. Supp. 2d
886, 905 (S.D. Ohio 2003).
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Defendants contend that they acted in good faith given that the evidence adduced at trial
indicated they adopted procedures and policies to comply with the FLSA. Despite this Court’s
reasoning that the policies Defendants implemented rendered their non-compliance more akin to
negligence than to willful violations of the FLSA, such is not sufficient to prove good faith. Elwell
v. Univ. Hosps. Home Care Servs., 276 F.3d 832, 841 n.5 (6th Cir. 2002) (“[A]n employer who
acted negligently—but not willfully—in violating the FLSA would not be able to satisfy the
objective standard of reasonableness required to demonstrate good faith.); Solis v. Min Fang Yang,
345 F. App’x at 39 (“[D]emonstrating good faith requires more than the absence of intent or
knowledge.”). Defendants produced no evidence that store management regularly followed up on
their notice policies or ensured employees were able to clock in to the meeting code consistently
when performing side work. Despite the company handbook provision stating a written policy
statement would be provided, Chris Beltran testified that he knew no such written statement existed
until after this lawsuit. Accordingly, Defendants should have taken affirmative steps to ensure that
the notice was being communicated orally and that the meeting codes were being utilized properly,
however, the evidence presented by Defendants at trial does not indicate this happened in reality.
This lack of evidence demonstrates that the Defendants did not have objectively reasonable
grounds for believing they were not violating the FLSA, and that Defendants did not act in good
faith. Thus, pursuant to 29 U.S.C. § 216(b), Plaintiffs are to be awarded liquidated damages under
the FLSA.
G. Damages
“Any employer who 	violates section 	203(m)(2)(B) 	of 	this 	title shall 	be 	liable 	to
the employee or employees affected in the amount of the sum of any tip credit taken by
the employer and all such tips unlawfully kept by the employer, and in an additional equal amount
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as liquidated damages.” 29 U.S.C. § 216(b). Plaintiffs are additionally entitled to reasonable
attorneys’ fees and costs. Id. As established above, Defendants have failed to prove its affirmative
defense that it complied with the requirements for taking a tip credit and that they acted in good
faith. Additionally, because Defendants failed to meet their burden of maintaining records,
Plaintiffs need not prove exact damages but rather are entitled to a speculative damages award
based on reasonable inference. See supra Section III.B. (citing Rafferty, 13 F.4th 1166). Thus,
Plaintiffs are entitled to the sum of any tip credit taken by the employer and liquidated damages in
an amount equal to his or her unpaid minimum wages. See Neuhoff v. Hosp. Goals LLC, 2025 WL
918811, at *3 (N.D. Ohio Mar. 26, 2025). Under Ohio law, however, an employee is entitled to
treble damages in an amount “two times the amount of back wages.” Scarbrough v. Motivated &
Empowered, Inc., 2022 WL 896672, at *3 (N.D. Ohio Mar. 28, 2022) (citing Ohio Rev. Code §
4111.14(J); Ohio Const., Art II. § 34a.).4
Accordingly, Plaintiffs are entitled to recover the amount of the tip credit taken for each hour
they worked, plus all misappropriated tips and unlawful deductions, plus an equal amount as
liquidated damages for the West Virginia Plaintiffs and two times that amount for the Ohio
Plaintiffs. See 29 U.S.C. § 216(b); Ohio Rev. Code §§ 4111.02, 4111.03, 4111.10, 4111.14(J).
IV. 	CONCLUSION
The Corporate Defendants are liable to Plaintiffs under the FLSA and the Ohio Minimum
Wage Fair Standards Act; Plaintiffs are entitled to an award of liquidated damages; and Plaintiffs’
4 “Although liability under the FLSA and Ohio law use the same standards to determine liability, the laws provide
different measures of liquidated damages. The FLSA provides that an employee is entitled to liquidated damages in
an amount equal to his or her unpaid minimum wages absent the defendant showing that the unlawful act or
omission was reasonable or in good faith. 29 U.S.C. §§ 216(b) & 260. In contrast, Ohio law provides than an
employee is entitled to liquidated damages in an amount “two times the amount of back wages.” Scarbrough, 2022
WL 896672, at *3.
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claims are subject to a two-year statute of limitations period under both the FLSA and the Ohio
Minimum Wage Fair Standards Act. There is no individual liability on behalf of Stephon Green
or Scott Lloyd. Plaintiffs are hereby AWARDED the following:
(1) $65,719.49 in unpaid minimum wages for the West Virginia Plaintiffs;
(2) $65,719.49 in liquidated damages for the West Virginia Plaintiffs;
(3) $54,521.13 in unpaid minimum wages for the Ohio Plaintiffs;
(4) $109,042.26 in treble damages for the Ohio Plaintiffs.
Any request for attorney fees may be brought in a motion pursuant to Fed. R. Civ. P.
54(d)(2). Such motion is to be filed within thirty (30) days of this Order. Defendants may file
Memorandum Contra within fourteen (14) days of Plaintiffs’ Motion, and Plaintiffs may file their
Reply within seven (7) days of receipt of Defendants’ Memoranda Contra.
IT IS SO ORDERED.
________________________________________
ALGENON L. MARBLEY
UNITED STATES DISTRICT JUDGE
DATED: June 5, 2026
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