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Bass v. 817 Corp

United States District Court, D. South Carolina

March 3, 2017

Sean Bass, individually and on behalf of others similarly situated, Plaintiff,
v.
817 Corp., Jason Stalker, and Liam Tyrrell, Defendants.

          ORDER AND OPINION

          RICHARD MARK GERGEL UNITED STATES DISTRICT COURT JUDGE.

         This matter is before the Court on Defendant's Motion to Dismiss Plaintiffs South Carolina Payment of Wages Act (SCPWA) claims pursuant to Rules 12 of the Federal Rules of Civil Procedure. (Dkt. No. 9). For the reasons below, the Court denies the motion.

         I. Statement of Facts[1]

         Defendant 817 Corp is a South Carolina limited liability company that operates Gene's Haufbrau, a restaurant located in Charleston, South Carolina. Defendant Stalker is an Owner and Manager of Gene's Haufbrau and 817 Corp, and Defendant Tyrell is the General Manager of Gene's Haufbrau and 817 Corp. Defendants employed Plaintiff as a server from November 9, 2006 to February 11, 2016.

         Defendants required Plaintiff and similarly situated servers to participate in a mandatory tip pool, which included tipping the Owners, Managers, and General Manager (collectively, "Management"). Defendants failed to inform Plaintiff and other similarly situated employees at any time regarding the amount of tip pool contributions they would be required to make. In addition, Defendants required Plaintiff and similarly situated servers to pay the Management a percentage of their gross alcohol sales when they worked shifts as bartenders or assisted bartenders. Defendants Stalker and Tyrrell worked 4 or 5 such shifts each week on average, and other Management occasionally worked such shifts.

         Plaintiff asserts two causes of action: (1) violations of the Fair Labor Standards Act (FLSA), and (2) violations of the South Carolina Payment of Wages Act (SCPWA). (Dkt. No. 1). Plaintiffs second cause of action alleges, inter alia, that Defendants violated the SCPWA by (1) failing to pay Plaintiff and other similarly situated servers all wages due, (2) failing to pay Plaintiff according to their employment agreement, and (3) improperly withholding wages without advance notice or any lawfully sufficient reason. Defendant subsequently filed a motion to dismiss Plaintiffs SCPWA claim, arguing that (1) tips are not considered "wages" under the SCPWA; (2) the FLSA preempts the SCPWA claim; and (3) Plaintiff failed to plead sufficient facts to meet the Twomblyllqbal plausibility standard, (Dkt. No. 9).

         II. Legal Standard

         Rule 12(b)(6) of the Federal Rules of Civil Procedure permits the dismissal of an action if the complaint fails "to state a claim upon which relief can be granted." Such a motion tests the legal sufficiency of the complaint and "does not resolve contests surrounding the facts, the merits of the claim, or the applicability of defenses. . . . Our inquiry then is limited to whether the allegations constitute 'a short and plain statement of the claim showing that the pleader is entitled to relief."' Republican Party of N, C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (quotation marks and citation omitted). In a Rule 12(b)(6) motion, the Court is obligated to "assume the truth of all facts alleged in the complaint and the existence of any fact that can be proved, consistent with the complaint's allegations." E. Shore Mkts., Inc. v. J.D. Assocs, Ltd. P'ship, 213 F.3d 175, 180 (4th Cir. 2000). However, while the Court must accept the facts in a light most favorable to the non-moving party, it "need not accept as true unwarranted inferences, unreasonable conclusions, or arguments, " Id.

         To survive a motion to dismiss, the complaint must state "enough facts to state a claim to relief that is plausible on its face." Bell Art. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although the requirement of plausibility does not impose a probability requirement at this stage, the complaint must show more than a "sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint has "facial plausibility" where the pleading "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.

         III. Discussion

         Defendants' motion to dismiss asserts that Plaintiffs SCPWA claim should be dismissed because (1) tips are not considered "wages" under the SCPWA; (2) the FLSA preempts the SCPWA claim; and (3) Plaintiff failed to plead sufficient facts to meet the Twombly!Iqbal plausibility standard. (Dkt. No. 9). The Court addresses each argument below.

         1. Tips are wages under SCPWA

         Plaintiff alleges that Defendants unlawfully withheld wages owed to him and other similarly situated employees by, inter alia, forcing them to contribute to a mandatory tip pool that included ineligible manager participants. Defendants claim that withholding tips does not violate the SCPWA because tips do not constitute wages under the SCPWA. (Dkt. No. 21 at 3-8). To address this issue, this Court must necessarily determine the state law question of whether tips are "wages" within the meaning of the SCPWA.

         The issue of whether tips constitute wages has arisen several times recently in the United States District Court for the District of South Carolina. Carbone v. Zen 333 Inc., No. 2T6-CV- 0108-DCN, 2016 WL 7383920, at *4 (D.S.C. Dec. 21, 2016) (holding that tips constitute wages under the SCPWA); Degidio v. Crazy Horse Saloon & Rest., Inc., No. 4:13-CV-02136-BHH, 2016 WL 3125467, at *5 (D.S.C. June 3, 2016) (same); Gardner v. Country Club, Inc., No. 4:13-CV-03399-BHH, 2016 WL 3125469, at *5 (D.S.C. June 3, 2016) (same); Spallone v. SOHO Univ., Inc., No. 4:15-CV-1622-RBH, 2015 WL 5098154, at *5 (D.S.C. Aug. 31, 2015) (allowing a claim alleging that tips constituted wages under the SCPWA to survive without determining whether tips actually constituted wages because defendants asserted only that the FLSA preempted the SCPWA claim); Foster v. M5 Hosp. Grp., LLC, No. 4:14-CV-4517-RBH, 2015 WL 5024404, at *5 (D.S.C. Aug. 24, 2015) (same); see also Browder v. Peninsula Grill Associates, LLC, No. 2T4-CV-4135-PMD, 2015 WL 4389502, at *1 (D.S.C. July 15, 2015) (noting ...


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