United States District Court, W.D. Oklahoma
R. ALEXANDER ACOSTA, Secretary of Labor, United States Department of Labor, Plaintiff,
MARGARET MARANTO, et al., Defendants.
TIMOTHY D. DeGIUSTI UNITED STATES DISTRICT JUDGE.
before the Court is Plaintiff's Motion for Summary
Judgment [Doc. No. 75] filed pursuant to Fed.R.Civ.P. 56 and
LCvR56.1. Plaintiff R. Alexander Acosta, Secretary of Labor,
seeks a judgment as a matter of law on all claims and an
order granting injunctive and monetary relief against
Defendants Meers Store & Restaurant, Inc.
(“Meers”) and Margaret Maranto. Defendants have
responded in opposition to the Motion [Doc. No. 112], and
Plaintiff has replied [Doc. No. 114]. The Motion is fully
briefed and ripe for decision.
case involves claims by the United States Department of Labor
(“DOL”) that Defendants violated the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. §§
201-19, by failing to pay minimum wages to certain employees,
failing to pay overtime compensation, failing to comply with
child labor provisions, and failing to maintain required
records. Plaintiff seeks injunctive relief prohibiting
further FLSA violations, an assessment of unpaid wages and
compensation owed to Defendants' employees, liquidated
damages, and a three-year period of recovery for willful
violations. Specifically, by its Motion, Plaintiff seeks to
recover unpaid wages of $167, 843.68, and an equal amount as
opposition to the Motion is largely based on a defense to
Plaintiff's claims previously asserted in a motion for
summary judgment filed by Meers. By its motion, Meers sought
to avoid FLSA liability by arguing that Margaret Maranto was
solely responsible for adopting and implementing the alleged
pay practices that violated FLSA and that she acted without
knowledge or authority from Meers in committing the
violations. After Defendants filed their response to
Plaintiff's Motion, the Court denied Meers' motion
because Meers did “not present sufficient facts or
legal authority to support its position.” See
9/19/17 Order [Doc. No. 115] at 5. In light of this ruling,
all contentions in Defendants' response to
Plaintiff's Motion that merely refer to Meers' motion
for summary judgment or repeat Meers' ultra
vires arguments are disregarded.
also oppose Plaintiffs' Motion by submitting an affidavit
of Randall O'Neal, their designated expert witness
regarding wage-and-hour matters. However, contemporaneously
with the Motion, Plaintiff filed a Daubert
motion to exclude expert testimony by Mr. O'Neal, and
after full briefing, the Court granted the motion.
See 3/28/18 Order [Doc. No. 124]. The Court found
that Defendants had failed to establish the admissibility of
Mr. O'Neal's expert opinions. Id. at 7.
Therefore, Defendants' references to Mr. O'Neal's
affidavit and arguments in opposition to summary judgment
based on his opinions are also disregarded.
judgment is proper “if the movant shows that there is
no genuine dispute as to any material fact and that the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). A material fact is one that “might
affect the outcome of the suit under the governing
law.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). A dispute is genuine if the evidence is
such that a reasonable jury could return a verdict for either
party. Id. at 255. All facts and reasonable
inferences must be viewed in the light most favorable to the
movant bears the initial burden of demonstrating the absence
of a dispute of material fact warranting summary judgment.
See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
(1986). If the movant carries this burden, the nonmovant must
then “set forth specific facts” that would be
admissible in evidence and that show a genuine issue for
trial. See Anderson, 477 U.S. at 248;
Celotex, 477 U.S. at 324; Adler v. Wal-Mart
Stores, Inc., 144 F.3d 664, 671 (10th Cir. 1998).
“To accomplish this, the facts must be identified by
reference to affidavits, deposition transcripts, or specific
exhibits incorporated therein.” Adler, 144
F.3d at 671; see also Fed. R. Civ. P. 56(c)(1)(A).
“The court need consider only the cited materials, but
may consider other materials in the record.”
See Fed. R. Civ. P. 56(c)(3). The Court's
inquiry is whether the facts and evidence identified by the
parties present “a sufficient disagreement to require
submission to a jury or whether it is so onesided that one
party must prevail as a matter of law.”
Anderson, 477 U.S. at 251-52.
of Undisputed Facts 
Meers is a corporation that operates a restaurant and, during
the relevant time period, employed 84 individuals identified
in Exhibit A to the Complaint [Doc. No. 1-1] as servers,
hostesses, cooks, kitchen staff, and bussers. Margaret Maranto
is a part-owner of Meers and served as its general manager
together with her husband, Joe Maranto. Both Mr. and Mrs.
Maranto had full management authority. Mrs. Maranto's
functions included setting Meers' employee policies,
hiring and firing employees, scheduling and directing their
work, setting compensation, computing hours worked from time
cards each pay period, and communicating with Meers'
accountants regarding payroll. Mrs. Maranto represented Meers
during DOL's investigation and provided information
regarding pay practices, record keeping, and child labor.
employees handled goods that had been moved in interstate
commerce, including time cards from Tennessee, liquid
sweetener from New York, and kitchen equipment from Indiana,
California, Mexico, and Italy. Meers had an annual gross
sales volume of $500, 000 or more for calendar years 2012,
2013, 2014, and 2015.
in November 2014, DOL investigated Meers' compliance with
FLSA's requirements regarding minimum wages, overtime
compensation, record keeping, and child labor restrictions.
Two investigators from DOL's Wage and Hour Division,
Cheryl Masters and Lindsey Arnold, visited Meers'
restaurant, made written requests for payroll and time
records, communicated with Meers' managers and attorney
regarding requested documents, interviewed witnesses, and
obtained written statements from 19 employees. Despite
requests for records from the previous three years,
Defendants produced time cards covering a three-month period
from October 15, 2014, to January 19, 2015. These time cards
were generated by a time clock used to record time worked by
Meers' employees; employees were required to clock-in at
the beginning of each shift and clock-out for breaks and at
the end of each shift.
investigation resulted in findings that Defendants had
committed minimum wage violations affecting certain employees
due to four identified policies or practices (see 29
U.S.C. § 206(a)(1)): 1) requiring employees to clock-out
for all breaks regardless of duration and excluding breaks,
including ones less than 20 minutes, from the computation of
hours worked; 2) making computational errors when
converting worktime on employees' time cards to a decimal
number for payment purposes by incorrectly rounding fractions
of hours (for example, recording 4:45 as 4.45 rather than
4.75 hours); 3) failing to include bussers on
Meers' payroll and paying no wages for their work
(instead, allowing bussers to be paid from servers'
tips); and 4) failing to pay servers a sufficient amount
during the restaurant's slow season when their wages as
tipped employees (who received an hourly rate plus tips in
accordance § 203(m)) were insufficient to reach the
minimum wage threshold.
investigation also resulted in a finding that Defendants had
violated FLSA's requirement to pay overtime compensation
at one and one-half times an employee's regular rate for
hours worked in excess of 40 hours in a workweek.
See 29 U.S.C. § 207(a)(1). Meers' payroll
was administered by an accounting firm that issued
employees' pay checks. Each pay period, Mrs. Maranto
reported to the accountant an amount of hours worked for each
employee that she computed from the employee's time card
and transferred to a handwritten summary sheet, omitting any
overtime hours. Mrs. Maranto then made cash payments to any
employees who had worked overtime, compensating them at their
regular rates for the hours not reported to the accountant
and thus not included in their payroll checks. Mrs. Maranto
engaged in this practice on a routine basis during the
investigation period. She also routinely destroyed the time
cards and summary sheets after each pay period, except during
the three-month period for which records were provided to
addition to destroying payroll records, Defendants failed to
keep other records as required by 29 U.S.C. § 211(c) and
implementing regulations. See 29 C.F.R. §§
516.1, 516.2, 516.4, 516.6. Defendants did not consider
bussers to be employees (see supra note 5) so there
was no record of their employment or payments they received.
Defendants did not record tips received by servers. At least
two employees were paid in cash only, and Defendants did not
retain any pay records for these employees. Due to Mrs.
Maranto's underreporting of wage information to
Meers' accountants, the payroll records kept by the
accountants were inaccurate. Defendants failed to keep a list
of all employee names and addresses during 2012 to 2014, and
did not display a required FLSA minimum wage poster in the
the investigation period, Defendants allowed two minors to
work as bussers when they were younger than 14 years old and,
therefore, prohibited from working in a nonagricultural
occupation. See 29 C.F.R. § 570.2. One of the
minors later worked as a busser in violation of federal
regulations restricting the work hours of children 14 and 15
years of age. See 29 C.F.R. § 570.35(a) (no
more than three hours on school days or eight hours on
non-school days, no more than 18 hours per school week, and
no working past 7:00 p.m. from Labor Day to June 1 or 9:00
p.m. from June 1 to Labor Day). Another employee who was
younger than 18 years of age during the investigation period
operated a meat slicer and a dough mixer on a regular basis
as a primary part of his job duties, in violation of 29
C.F.R. §§ 570.61 and 570.62.
her testimony in this case, Mrs. Maranto has admitted these
errors occurred. Defendants do not dispute the facts and
evidence presented by Plaintiff to establish
them.In fact, Defendants concede that FLSA
violations occurred, but blame Mrs. Maranto for committing
them. See, e.g., Defs.' Resp. Br. at 6
(“Margaret Maranto told employees that Meers refused to
pay overtime” and “Mrs. Maranto engaged in the
practice of withholding some of the [wage] information
instead of providing it to the CPA firm”). In
deposition testimony, however, Mr. Maranto also derided
FLSA's requirements, stating that Meers' employees
were not entitled to receive overtime compensation or to be
paid for work breaks of any duration. See J. Maranto
Dep. 114:11-115:2, 142:2-18. Records of Meers' payroll
and employee practices after the investigation period showed
that many of the same FLSA violations continued to occur.
See Masters Aff. [Doc. No. 75-1], ¶ 34.
their brief, Defendants present evidence intended to show
that they relied on the advice of Meers' accountant,
Danny Delciello, to ensure FLSA compliance and to pay
employees properly. This evidence consists of conclusory
statements in affidavits of Mr. and Mrs. Maranto that they
followed the advice of Mr. Delciello prior to his death in
2014, and “if [they] were violating the law with regard
to minimum wage or overtime, it was the result of [their]
reliance on our CPA.” See J. Maranto Aff.
[Doc. No. 112-1], ¶ 11; M. Maranto Aff. [Doc. No.
112-2], ¶ 10. Both Mr. and Mrs. Maranto deny
“intentionally or willfully violating the law, ”
and both say, “We were doing our best to follow the
law.” Id. Despite these statements, Defendants
provide no facts to show that Mr. Delciello provided advice
regarding the minimum wage issues identified by DOL
(deducting break periods, rounding fractional hours, and not
paying bussers or making seasonal adjustments in wages of
tipped employees). Further, regarding overtime, Mr. Maranto
has testified that Mr. Delciello specifically advised him
that Meers was required to pay one and one-half times the
regular rate for overtime hours. See J. Maranto Dep.
170:6-171:8. As stated supra, Mrs. Maranto
has admitted intentionally omitting employees' overtime
hours from the payroll summaries she created, and withholding
information from Meers' accountants about overtime
payments to employees. There is no evidence the accountants
knew of this practice.
a lack of payroll records and a limited amount of historical
information, DOL investigators calculated an amount of unpaid
wages due to Meers' employees using estimation methods,
as described in the affidavit of Cheryl Masters, to
reconstruct back wages owed for each category of worker
(part-time kitchen staff, full-time kitchen staff, servers,
hostesses, bussers, and kitchen managers). For example, to
calculate unpaid wages for improperly deducting work breaks
of less than 20 minutes, Ms. Masters used time records and
interview statements to estimate a total amount of
off-the-clock (“OTC”) work time, and determined
an average amount of OTC time for different categories of
workers during slow seasons and busy seasons. In a similar
manner, Ms. Masters estimated overtime compensation owed by
determining the average number of hours worked by employees
in each category and reconstructing hours worked and overtime
wages due to ...