Perez v. Lorraine Enterprises, Inc.

Summary

The First Circuit affirmed summary judgment for the Secretary of Labor in an action alleging that a Puerto Rico restaurant violated the Fair Labor Standards Act's minimum-wage, overtime, and recordkeeping requirements. The court held that the defendants failed to establish eligibility for the FLSA tip credit because they did not provide employees adequate notice, and rejected their due process and individual-liability challenges. The court also affirmed the denial of the defendants' motion to alter or amend the judgment.

Holdings

1. The defendants' due-process rights were not violated because the Secretary's allegation that the defendants violated the FLSA minimum-wage provision put them on notice that their eligibility for the tip credit, including the notice requirement, was at issue.
2. The defendants were ineligible for the tip credit because they failed to produce definite and competent evidence that the affected waiters were informed in advance that the employer intended to count their tips toward the minimum wage.
3. Summary judgment for the Secretary was proper because the defendants failed to identify a genuine dispute of material fact concerning the notice prerequisite to the tip credit.
4. The district court did not err in imposing individual liability on Lago and Gonzalez because they admitted facts showing active control and management of the corporation and did not timely challenge personal liability.

Questions Presented

1. Whether the defendants' due-process rights were violated because the Secretary allegedly raised the lack-of-tip-credit-notice issue only when moving for summary judgment.
2. Whether the defendants produced sufficient evidence of employee notice to create a genuine issue of material fact and defeat summary judgment on the FLSA minimum-wage claim.
3. Whether Lorraine Lago and Pedro Gonzalez could be held individually liable as employers under the FLSA.
4. Whether the district court abused its discretion in denying the defendants' Rule 59(e) motion to alter or amend the judgment.

Disposition

affirmed