Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-5_13-cv-01395/USCOURTS-alnd-5_13-cv-01395-0/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 29:201 Fair Labor Standards Act

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UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

NORTHEASTERN DIVISION

OSCAR MARQUEZ, et al.,

Plaintiffs,

v.

EL PORTAL, INC., et al.,

Defendants.

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Case No.: 5:13-cv-01395-JHE

MAGISTRATE JUDGE’S REPORT AND RECOMMENDATION

Plaintiffs Oscar Marquez, Eladio Gaspar Domingo, Veronica Segoviano, Erika Brito, and 

Jose Castillo bring this action against their employers, El Portal, Inc., El Portales, Inc., and Alvaro 

Salazar, for violations of the Fair Labor Standards Act (“FLSA”), and for breach of contract and 

fraud under Alabama law. (Doc. 14).1 Defendants counterclaimed against Marquez. (Doc. 6 at 

14-19). Defendants have moved for summary judgment on all of Plaintiffs’ claims, (docs. 49 & 

50), and Plaintiffs have moved for partial summary judgment on their FLSA claim, (docs. 51 & 

51-45). Defendants have also moved to strike an expert report from Plaintiff’s motion and an 

affidavit attached to Plaintiffs’ reply. (Docs. 61 & 64). The motions are briefed and ripe for 

review. (Docs. 50, 51-45, 57, 59, 60, 61, 63, 64, 66-1, 67, 68, & 69). The parties have not 

consented to magistrate judge jurisdiction pursuant to 28 U.S.C. § 636(c). For the reasons stated 

below, the undersigned recommends Defendants’ motion for summary judgment be GRANTED 

 

1 The amended complaint originally included Plaintiff Maria Domingo, (doc. 14); however, 

she voluntarily dismissed her claims against Defendants with prejudice pursuant to Rule 

41(a)(1)(A)(ii), FED. R. CIV. P., (docs. 55 & 56). Mr. Gaspar Domingo’s first name has been 

variously spelled “Eladrio” and “Eladio,” but he testified the correct spelling is “Eladio.” 

(Doc. 49-5 at 4 (9)).

FILED

 2017 Jan-12 PM 01:31

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 5:13-cv-01395-MHH Document 72 Filed 01/12/17 Page 1 of 34
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IN PART and DENIED IN PART, and Plaintiffs’ motion for summary judgment be DENIED.

I. Standard of Review

Under Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment is proper “if 

the movant shows that there is no genuine dispute as to any material fact and the movant is entitled 

to judgment as a matter of law.” “Rule 56(c) mandates the entry of summary judgment, after 

adequate time for discovery and upon motion, against a party who fails to make a showing 

sufficient to establish the existence of an element essential to that party’s case, and on which that 

party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 447 U.S. 317, 322 (1986). 

The moving party bears the initial burden of proving the absence of a genuine issue of material 

fact. Id. at 323. The burden then shifts to the nonmoving party, who is required to “go beyond the 

pleadings” to establish that there is a “genuine issue for trial.” Id. at 324. (citation and internal 

quotation marks omitted). A dispute about a material fact is genuine “if the evidence is such that 

a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, 

Inc., 477 U.S. 242, 248 (1986).

The Court must construe the evidence and all reasonable inferences arising from it in the 

light most favorable to the non-moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 

(1970); see also Anderson, 477 U.S. at 255 (all justifiable inferences must be drawn in the nonmoving party’s favor). Any factual disputes will be resolved in Plaintiff’s favor when sufficient 

competent evidence supports Plaintiff’s version of the disputed facts. See Pace v. Capobianco, 

283 F.3d 1275, 1276-78 (11th Cir. 2002) (a court is not required to resolve disputes in the nonmoving party’s favor when that party’s version of the events is supported by insufficient evidence). 

However, “mere conclusions and unsupported factual allegations are legally insufficient to defeat 

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a summary judgment motion.” Ellis v. England, 432 F.3d 1321, 1326 (11th Cir. 2005) (per curiam) 

(citing Bald Mtn. Park, Ltd. v. Oliver, 836 F.2d 1560, 1563 (11th Cir. 1989)). Moreover, “[a] mere 

‘scintilla’ of evidence supporting the opposing party’s position will not suffice; there must be 

enough of a showing that the jury could reasonably find for that party.” Walker v. Darby, 911 

F.2d 1573, 1577 (11th Cir. 1990) (citing Anderson, 477 U.S. at 252). 

II. Evidentiary Objections2

As a threshold matter, the Court must address Defendants’ motions to strike evidence 

attached to Plaintiffs’ briefs. With the December 1, 2010 rules change to Rule 56 of the Federal 

Rules of Civil Procedure, motions to strike submitted on summary judgment are no longer 

appropriate. Revised Rule 56(c)(2) provides that “[a] party may object that the material cited to 

support or dispute a fact cannot be presented in a form that would be admissible in evidence.” The 

Advisory Committee Notes specify as follows:

Subdivision (c)(2) provides that a party may object that material cited 

to support or dispute a fact cannot be presented in a form that would be 

admissible in evidence. The objection functions much as an objection at trial, 

adjusted for the pretrial setting. The burden is on the proponent to show that 

the material is admissible as presented or to explain the admissible form that is 

anticipated. There is no need to make a separate motion to strike. If the case 

goes to trial, failure to challenge admissibility at the summary-judgment stage 

does not forfeit the right to challenge admissibility at trial.

Fed. R. Civ. P. 56, Adv. Comm. Notes, “Subdivision (c)” (2010 Amendments). “Before 

this amendment, parties properly challenged evidence used in a summary judgment motion by 

filing a motion to strike. The plain meaning of these provisions show that objecting to the 

 

2 All citations to the record refer to document and page numbers as assigned by the Court’s 

electronic filing system, except for citations to depositions and documents with numbered 

paragraphs, which also include a parenthetical with the specifically cited deposition page 

number(s) or numbered paragraph(s).

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admissibility of evidence supporting a summary judgment motion is now a part of summary 

judgment procedure, rather than a separate motion to be handled preliminarily.” Campbell v. 

Shinseki, 546 Fed. App’x 874, 879 (11th Cir. 2013).

With regard to documents submitted as evidence, the 2010 rule change has, as it has with 

motions to strike on summary judgment, modified the applicable procedure. Under the former 

Rule 56, subsection (e) required documents supporting a motion for summary judgment be 

authenticated: “If a paper or part of a paper is referred to in an affidavit, a sworn or certified copy 

must be attached to or served with the affidavit.” FED. R. CIV. P. 56(e)(1) (2009 version). Revised 

Rule 56 eliminated the bright-line requirement that documents be authenticated and 

allows a party making or opposing a summary judgment motion to cite to 

materials in the record including, among other things, “depositions, documents, 

electronically stored information, affidavits or declarations” and the like. FED. 

R. CIV.P. 56(c)(1)(A). If the opposing party believes that such materials 

“cannot be presented in a form that would be admissible in evidence,” that party 

must file an objection. FED. R. CIV.P. 56(c)(2). Significantly, the objection 

contemplated by the amended Rule is not that the material “has not” been 

submitted in admissible form, but that it “cannot” be.

Abbott v. Elwood Staffing Servs., Inc., 44 F. Supp. 3d 1125, 1134 (N.D. Ala. 2014) (quoting 

Foreword Magazine, Inc. v. OverDrive, Inc., 2011 WL 5169384, at *2 (W.D. Mich. 2011)). In 

effect, “[u]nder the 2010 amendment, which became effective on December 1, 2010, 

authentication of documents no longer is required at the summary judgment stage.” Agee v. 

Chugach World Servs. Inc., No. 5:12-CV-2119-MHH, 2014 WL 5795555, at *5 (N.D. Ala. Sept. 

30, 2014). Once the opposing party objects “that the materials . . . cannot be presented in a form 

that would be admissible in evidence,” FED. R. CIV. P. 56(c)(2) (emphasis added), “[t]he burden is 

on the proponent to show that the material is admissible as presented or to explain the admissible 

form that is anticipated.” FED. R. CIV. P. 56, Adv. Comm. Notes, “Subdivision (c)” (2010 

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Amendments).

Accordingly, the undersigned construes the parties’ motions to strike as objections to “the 

material cited to support or dispute” the other’s facts on summary judgment. Because admissibility

of evidence at the summary judgment stage does not affect admissibility at trial, the parties’ 

arguments will only be considered to the extent they address material cited for summary judgment 

purposes, and material successfully challenged will not be considered in the facts and analysis 

below. 

Objections to Marquez Affidavit

Defendants’ primary argument against the Marquez Affidavit is that it is “new evidence” 

attached to a reply and should not be considered because it was submitted in violation of the 

Scheduling Order and Defendants “have not been afforded [an] opportunity to respond to this new 

evidence.” (Doc. 64 at 2-3). They also briefly contend it is “nothing more than a failed attempt 

to authenticate the records their client, Oscar Marquez admitted to stealing during his deposition” 

and the Court considering “such improper evidence” would deprive them of “a full and fair 

opportunity to be heard.” (Id. at 3).

While the Marquez affidavit is an attempt to authenticate the records, it is for that very 

reason that it is not “new evidence,” the consideration of which would deprive Defendants of a fair 

hearing. In their reply brief in support of their motion for summary judgment and in their motion 

to strike the Plaintiffs’ expert report, Defendants contend the evidence upon which the expert 

report is based is inadmissible as hearsay. (Doc. 60 at 4; doc. 61 at 3-5). Because Defendants 

have raised the issue of inadmissibility under Rule 56(c)(2), “[t]he burden is on [Plaintiff] to show 

that the material is admissible as presented or to explain the admissible form that is anticipated.” 

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FED.R.CIV. P. 56, Adv. Comm. Notes, “Subdivision (c)” (2010 Amendments). Defendants cannot 

deprive them of that opportunity by applying the “new evidence” label to the affidavit attempting 

to establish the documents’ admissibility. The documents attached to the affidavit are identical to 

those already in the record. (Compare doc. 57-9 at 1-12 & 57-10 at 1-3, with doc. 63-3 at 6-18). 

Whether the affidavit is sufficient to establish the admissibility of the documents is one of the 

primary arguments in the objection to the expert report and will be considered below, but the 

objection to consideration of the Marquez affidavit is OVERRULED.

Objections to Plaintiffs’ Expert Report

Admissibility of expert testimony requires a determination whether “(1) the expert is 

‘qualified to testify competently regarding the matters he [or she] intends to address’; (2) the 

expert’s methodology is ‘sufficiently reliable’; and (3) the expert testimony ‘assists the trier of 

fact.’” Moulton v. DeSue, No. 3:11-CV-382-J-37JBT, 2012 WL 8963571, at *1 (M.D. Fla. Nov. 

1, 2012) (quoting City of Tuscaloosa v. Hacros Chemicals, Inc., 158 F.3d 548, 562 (11th Cir. 

1998)). Regarding Plaintiffs’ Expert Report, (doc. 57-8), Defendants make two main arguments: 

it is due to be stricken because it is unsworn, (doc. 61 at 2-3), and subparts 1-6, 9,3and 12-14 (the 

underlying documents and expert calculations based thereon) are unauthenticated and inadmissible 

hearsay, (id. at 3-5). The former is a general evidentiary objection and the latter essentially argues 

the evidence will not assist the trier of fact because an expert’s opinion regarding inadmissible 

 

3 There does not appear to be an Exhibit 9 attached to the expert report, (see doc. 57-13 at 

12; doc. 57-14 at 1-12; doc. 57-15 at 1-12; doc. 57-16 at 1-9); however, Exhibit 9 also appears to 

be a spreadsheet of the expert’s own analysis, an excerpt from which appears in the report, (see

doc. 57-7 at 7 n.12 & 8), and which the expert could, and did, verify and affirm by affidavit, (doc. 

66-2 at 1 (¶¶ 3-4)).

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evidence is irrelevant.4

Plaintiffs respond to the first argument by stating the expert report is a final report and 

“verified and reaffirmed” by declaration attached to the response. (Doc. 66-1 at 2-4). To the 

second argument, Plaintiffs contend Marquez authenticated the documents at his deposition and in 

his affidavit attached to the reply because he was the custodian of these records. (Doc. 66-1 at 4-

5). Defendants’ reply counters that (1) the expert’s affidavit does not consider the questionable 

authenticity of the evidence he based his conclusions on, does not state he is competent to testify 

to the matters therein, and, regardless, does not cure any deficiencies in the subparts, and (2) 

Plaintiffs do not show how the records are admissible or what admissible form they could have at 

trial. (Doc. 68 at 1-3).

Objections to Lack of Foundation for Report

First, the objection to the expert report as unsworn is not well taken. Assuming 

Defendants’ objection qualified as a showing the evidence “cannot be presented in a form that 

would be admissible in evidence,” the courts have repeatedly held an expert may cure any defect 

in an unsworn report by subsequent affidavit or declaration. See Hudson v. Pennsylvania Life Ins. 

Co., No. CV-12-S-2225-NE, 2013 WL 3242877, at *10 (N.D. Ala. June 21, 2013); Volterra 

Semiconductor Corp. v. Primarion, Inc., 796 F. Supp. 2d 1025, 1039 (N.D. Cal. 2011) (citing 

Maytag Corp. v. Electrolux Home Products, Inc., 448 F. Supp. 2d 1034, 1064 (N.D. Iowa 2006)); 

Cf. Southland Health Servs., Inc. v. Bank of Vernon, 887 F. Supp. 2d 1158, 1171-72 (N.D. Ala. 

2012) (holding that unsworn preliminary expert reports could not be considered where expert’s 

 

4 Because Defendants do not challenge the expert’s qualifications or his methodology, the 

undersigned does not address these prongs of the analysis. See Moulton, No. 3:11-CV-382-J37JBT, 2012 WL 8963571, at *2 n.1.

Case 5:13-cv-01395-MHH Document 72 Filed 01/12/17 Page 7 of 34
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testimony undermined the report’s conclusions and the expert never provided a supporting 

affidavit). These holdings are certainly in line with the 2010 Amendments to Rule 56.

Defendants seem to acknowledge as much, shifting the arguments in their reply to the 

equally unpersuasive argument the expert’s affidavit failed “to state whether he reaffirms his 

opinion and verifies such opinion in light of the nature of Subparts 1 and 2 and the fact that these 

documents’ authenticity is disputed.” (Doc. 68 at 1-2). Considering the fact the expert has not 

opined—and has not been asked to opine—on the question of the underlying documents’ 

authenticity, it is unclear why such an affirmation is necessary. The expert’s report clearly assumes 

the authenticity of the underlying documents, (see doc. 66-3), and, although the viability of his 

conclusions may depend on the authenticity and admissibility of those documents, the 

admissibility of his report does not depend on his opinion of the authenticity of those documents.

Defendants also contend the affidavit “fails to state it is made on personal knowledge and 

that [the expert] ‘is competent to testify to the matters related therein.’” (Doc. 68 at 2) (quoting 

Southland, 887 F. Supp. 2d at 1169). However, the affidavit explicitly states the expert has 

“personal knowledge of the fact in this Affidavit” and that the attached copy of his report 

“accurately reflects [his] qualifications, professional opinions and documents relied upon in 

forming such opinions.” (Doc. 66-2 at ¶¶ 1 & 3). There does not appear to be any defect in the 

report’s authenticity or admissibility.

Objection to Foundation and Admissibility of the Underlying Documents

Second, Defendants contend certain subparts (documents upon which the report is based) 

have not been authenticated and are inadmissible hearsay. Further, they argue all but one of the 

challenged subparts do not fall into the business records exception because they are not 

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accompanied by a document stating they were received and preserved in the regular course of 

business. Then, they further contend Marquez stole two of the subparts, breaking the chain of 

custody.

As for the authentication argument, Defendants do not cite a single case addressing the 

2010 Amendments to Rule 56. The case they do cite was released before the 2010 Amendments 

were even enacted and almost a full year before they became effective. (Doc. 61 at 4-5) (citing 

Saunders v. Emory Healthcare, Inc., 360 F. App’x 110, 113 (11th Cir. 2010) (issued January 11, 

2010). See also FED. R. CIV. P. 56 (enacted, in its current form, April 28, 2010, and effective 

December 1, 2010). “However, ‘[t]he Saunders opinion [Defendants cite] does not govern this 

issue because Rule 56 was amended in 2010. Under the 2010 amendment, which became effective 

on December 1, 2010, authentication of documents no longer is required at the summary judgment 

stage.’” Sanders v. Benjamin Moore & Co., No. 4:11-CV-0397-JEO, 2015 WL 1489855, at *38 

(N.D. Ala. Mar. 31, 2015) (quoting Agee v. Chugach World Services, Inc., 5:12-cv-2119-

MHH, 2014 WL 5795555, *5 (N.D. Ala. Sept. 30, 2014) (citing Abbott v. Elwood Staffing Servs., 

Inc., 1:12-cv-2244-VEH, 2014 WL 3809808 (N.D. Ala. July 31, 2014) (“The majority of the 

opinions this Court has read from courts construing current Rule 56, however, state the 

amendments eliminated the authentication requirement and replaced it with a requirement that 

evidence be presentable in admissible form at trial .”))).

Only the second argument implies the necessary objection under Rule 56(c)(2) (i.e., “that 

the material cited . . . cannot be presented in a form that would be admissible in evidence”), 

arguing the evidence is inadmissible hearsay because, Marquez having broken the chain of custody 

of the documents, they do not fall into the business-records exception. (Doc. 68 at 3). Having 

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done so, “[t]he burden is on [Plaintiffs] to show that the material is admissible as presented or to 

explain the admissible form that is anticipated.” FED. R. CIV. P. 56, Adv. Comm. Notes, 

“Subdivision (c)” (2010 Amendments).

Plaintiffs contend Marquez could and did establish the documents as business records 

because he was the custodian of the records. (Doc. 66-1 at 4-5). Specifically, they contend 

Defendants’ assertion the documents were stolen is a “red herring” because “so long as the 

documents can be properly authenticated, they should be considered at summary judgment” and 

Marquez was the one responsible for maintaining and compiling the documents that were 

submitted to the accountant. (Id. at 4-5). Defendants’ counterargument focuses on the elements 

of the hearsay exception, asserting the documents “were not preserved in the regular course of 

business” because Marquez “broke the chain of custody.” (Doc. 68 at 3). Defendants do not cite 

any cases to support this particular interpretation of the evidentiary rule.

The hearsay exception for records of regularly conducted activities allows a record to be 

used for the truth of its contents if

(A) the record was made at or near the time by—or from information 

transmitted by—someone with knowledge;

(B) the record was kept in the course of a regularly conducted activity 

of a business, organization, occupation, or calling, whether or not for profit;

(C) making the record was a regular practice of that activity;

(D) all these conditions are shown by the testimony of the custodian or 

another qualified witness, or by a certification that complies with Rule 902(11) 

or (12) or with a statute permitting certification; and

(E) the opponent does not show that the source of information or the 

method or circumstances of preparation indicate a lack of trustworthiness.

FED. R. EVID. 803(6). Defendants do not dispute the alleged records meet requirements A, 

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C, D, and E, but contend only that “no affiant or declarant states that these document were received 

and preserved in the regular course of business.” (Doc. 68 at 3).

However, Marquez’s affidavit establishes he was the General Manager for Defendants and 

part of his responsibilities was maintenance of the companies’ records. (Doc. 63-3 at 2). His 

deposition further establishes his knowledge of the companies’ recordkeeping procedures, part of 

which seems to include records staying in his vehicle or home office for long periods of time. 

(Doc. 49-7 at 38-41 (142-155)). Salazar similarly stated that, as General Manager, Marquez “was 

responsible for maintaining financial records and delivering those records to [the] accountant.” 

(Doc. 49-1 at 3 (¶ 11)). The documents at issue were made and originally preserved in the regular 

course of Defendants’ business and only ceased being kept and preserved under what appears to 

be their common (if not official) practice when Marquez was fired and was no longer officially 

authorized to retain them.

This chain of custody issue, however, merely goes to the weight of the evidence before the 

jury and does not deprive them of their character as business records. See Solutia, Inc. v. McWane, 

Inc., No. 1:03-CV-1345-PWG, 2012 WL 2031350, at *13 (N.D. Ala. June 1, 2012) (“[G]aps in 

the chain of custody normally go to the weight of the evidence rather than its admissibility.”) 

(quoting Melendez-Diaz v. Massachusetts, 557 U.S. 305, 311 n.1 (2009)). See also Chapman v. 

Wagener Equities, Inc., No. 09 C 07299, 2014 WL 540250, at *10 (N.D. Ill. Feb. 11, 2014) (“Any 

chain of custody problems, such as questions about the handling of the hard drive after it left Joel 

Abraham’s possession, would not defeat authentication under the business records exception. A 

chain of custody is a ‘common requirement in authenticating evidence . . . [but] an uninterrupted 

chain of custody is not a prerequisite to admissibility. Instead, gaps in the chain go to the weight 

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of the evidence, not its admissibility.’”) (quoting Cooper v. Eagle River Mem. Hosp., Inc., 270 

F.3d 456, 463 (7th Cir. 2001)) (modifications in original).

As a result, the documents, despite any dispute about their authenticity, 5have been 

established as business records, and Defendants’ objection to their admissibility is not well taken. 

Therefore, because both of Defendants’ arguments against the expert report fail and they do not 

otherwise dispute its admissibility as an expert opinion, their objection to its consideration on 

summary judgment is OVERRULED.

III. Summary Judgment Facts

The Restaurants

Defendant Alvaro Salazar is a Mexican citizen, who immigrated to the United States in the 

1980s and now holds a U.S. permanent resident card. (Doc. 49-9 at 4-5 (9-10 & 13)). Since 

immigrating to the U.S. Salazar has held many jobs, including several in Mexican restaurants. (Id.

at 7-8 (19-26)). After a while, he began to open his own restaurants. (Id. at 9 (27-28) & 15-16 

(53-54)). In 2001, he opened his first, solely owned Mexican restaurant, named El Portal, which 

he operated through El Portal, Inc. (Id. at 6 (17) & 12 (38 & 40-41)). In 2005, he opened a second 

restaurant, also called El Portal, and operated it through a second corporation he formed, named 

El Portales, Inc. (Id. at 13 (42-43), 18 (65), & 29; doc. 57-2 at 3 (¶ 4) (not disputing the name of 

the restaurant, only the official name of the corporation). This second corporation is sometimes 

referred to as Los Portales, Inc. in the record, which appears to have been the originally intended 

 

5 Defendants also assert Marquez “possibly forged evidence” but do not cite any evidence 

to support this contention. (Doc. 69 at 2).

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name, but for a mistake by the accountant who set it up on Defendant Alvaro Salazar’s behalf. (Id.

at 13 (43-45); doc. 51-33 at 2-3).6

The first restaurant has a bank account at Regions Bank, and the second restaurant has a 

separate account at Bank Independent. (Doc. 49-9 at 14 (46)). Checks from the Bank Independent 

account were sometimes labeled “El Portal” and sometimes “Los Portales” but always had the 

same address for the second restaurant. (Doc. 49-9 at 15 (51) (noting the second El Portal 

restaurant’s checks from the Bank Independent account were labeled “1315 Highway 31 

Northwest, Hartselle, Alabama 35640”); doc. 57-8 at 9 (noting all the checks had the same address 

(1315 Highway 31 NW, Hartselle, AL 35640)); doc. 57-17 at 4-9 (showing some checks labeled 

“El Portal” and some “Los Portales”); doc. 57-18 at 5-8 (same)). Only this one bank account at 

Bank Independent was used to write payroll checks during the time all of the plaintiffs worked for 

Defendants from 2010 through 2014. (Doc. 49-9 at 22 (79-80)).

The entities’ combined gross receipts reported for income tax in 2010, 2011, 2012, and 

2013 exceeded $500,000 each year. (Docs. 51-36 & 51-37). Assuming all reasonable inferences 

in Plaintiffs’ favor for purposes of Defendants’ motion, the monthly cash revenue and annual gross 

revenue of El Portal and Los Portales are materially under-reported, and Los Portales exceeded 

$500,000 in gross receipts for every year between 2010 and 2013. (Doc. 57-8 at 4-8). Assuming 

all reasonable inferences in Defendants’ favor for purposes of Plaintiffs’ motion, the federal tax 

returns provided by Los Portales are accurate, and its gross receipts did not exceed $500,000 any 

year between 2010 and 2013. (Doc. 49-1 at 6, 13, 21, & 29).

 

6 To distinguish the two restaurants and their operating companies, this Report and 

Recommendation will refer to “El Portal, Inc.” and the restaurant operated by it as “El Portal,” and 

“El Portales, Inc.” and the restaurant operated by it as “Los Portales.”

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Oscar Marquez

In late 2005, Salazar met and hired Marquez, who was working in Tennessee as a manager 

of another Mexican restaurant, to be general manager of both El Portal locations, beginning 

January 1, 2006. (Doc. 49-7 at 8 (22), 11 (35-37), & 12 (39-40); doc. 49-9 at 18 (65)). He remained 

in that position until June 30, 2013. (Doc. 49-7 at 39 (148); doc. 57-2 at 4 (not disputing these 

facts)). As general manager, Marquez had keys to the restaurant’s office; set work schedules and 

menu prices; and, along with Salazar, could hire and fire employees, although Marquez testified 

Salazar “always had the last word.” (Doc. 49-7 at 12 (41-43), 22 (78), & 31 (115); doc. 49-9 at 18 

(64-65)). Marquez signed payroll checks and checks to vendors, as a signatory on the first 

restaurant’s bank account and with permission to sign Salazar’s name on checks from the second 

restaurant when Salazar was not there. (Doc. 49-7 at 13 (43-44) & 48 (183)). He was also 

responsible for filling out new employee paperwork, although he testified Salazar sometimes told 

him to wait on filling out paperwork for a week to see if the employee worked out. (Id. at 13 (44-

45), 18 (64-65), & 20 (70-71)). He ran the day-to-day operations (according to Marquez, based 

on Salazar’s detailed instructions and only with his permission on any particular decision), and 

people in town thought Marquez owned the restaurants. (Id. at 21-22 (75 & 77-78) & 23-24 (85-

86)). He was paid $1,400 twice a month in salary for the majority of his tenure, but, for his last 

six months with the restaurants, he was paid that amount only once a month. (Id. at 34 (127-29); 

doc. 60 at 1 (not disputing this fact)).

Salazar travelled to Mexico at least eight times a year on trips usually lasting a week to ten 

days but up to three weeks or a month. (Doc. 49-9 at 23 (84-85)). Salazar testified he was not at 

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the restaurant often even when he was in town, (id. at 24 (86-87)), but Marquez testified he was 

there every day, (doc. 49-7 at 21 (76)).

Salazar used Laura Walker of Walker & Associates to handle the payroll and taxes for both 

of his restaurants. (Doc. 49-9 at 20 (72)). Marquez was responsible for completing and delivering 

the bi-weekly payroll timesheets to Walker & Associates, from which Walker prepared payroll 

checks and calculated withholdings for employees. (Doc. 49-1 at 3 (¶ 11); doc. 49-2 at 3 (¶¶ 9, 

12, & 14-16); doc. 49-7 at 13 (45)). She returned all of the original documents to Marquez when 

payroll and tax preparation was complete. (Doc. 49-2 at 3 (¶¶ 12 & 17)).

Marquez testified that, during his last two years at the restaurants, he felt he had been 

pushed out by, and lost the authority to hire and fire to, Salazar’s son, daughter, and son-in-law. 

(Doc. 49-7 at 18 (62-64)). In 2013, Marquez had an affair with Salazar’s daughter-in-law. (Id. at 

24-25 (87-93)). When the affair was discovered, Salazar fired Marquez in June 2013. (Doc. 49-1 

at 3 (¶ 10)). 

The Other Plaintiffs

The other plaintiffs, Eladio Gaspar Domingo, Veronica Segoviano, Erika Brito, and Jose 

Castillo all worked at the second El Portal restaurant around the same time period. (Doc. 57-2 at 

6 (not disputing this fact in ¶ 19)).7

 

7

In their opposition to Plaintiffs’ motion for partial summary judgment, Defendants 

dispute that Castillo, Segoviano, and Brito worked at the restaurant on the grounds none produced 

valid identification and each took the Fifth Amendment when asked about their proof of 

identification. (Doc. 59 at 5-6, 8). To the extent Defendants suggest this calls into question 

whether those plaintiffs worked at the Los Portales restaurant, Defendants never develop this 

beyond implication. 

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Erika Brito moved to the United States from Mexico over ten years ago, and Marquez hired 

her as a server at the restaurant in December 2011, where she worked until December 2012. (Doc. 

49-3 at 4-5 (9-10) & 7 (19)). Marquez gave her her work schedule the entire time she worked 

there. (Id. at 11 (35); doc. 57-2 at 7 (not disputing this fact in ¶ 21)). Brito testified Marquez did 

not have her fill out paperwork when she first started working, but, later, Salazar made her fill out 

an application and other employment and payroll documentation. (Doc. 49-3 at 7 (19-20) & 9 

(26); doc. 57-2 at 7 (not disputing these facts in ¶ 22)). She was to report problems at work to 

Marquez and never reported a pay problem to Salazar. (Doc. 49-3 at 9 (29); doc. 57-2 at 7 (not 

disputing these facts in ¶ 23)).

Jose Castillo is also from Mexico. (Doc. 49-4 at 4 (8)). He testified he worked at the 

second restaurant as a server from October 2012 until June 2013, where he was paid only in tips. 

(Id. at 13-14 (45 & 48)). He testified he usually worked a total of fifty-eight hours a week. (Id. at 

14-15 (49-52)). He was ultimately fired for failing to show up for work one day. (Id. at 15 (53)). 

While working there, he never reported a problem with his pay to Salazar. (Id. at 15 (52)).

Eladio Gaspar Domingo is originally from Guatemala. (Doc. 49-5 at 5 (11)). Marquez 

hired him to work at the restaurant, and he lived with Marquez while he worked there. 

(Id. at 8 (22)). He joined the lawsuit because he lived with Marquez and Marquez asked him to. 

(Id. at 13 (45)). Because they lived near the restaurant, Domingo was allowed to go home during 

his break. (Id. at 20 (70)). Domingo met Salazar after he had worked at the restaurant for a week 

and did not realize he was the owner. (Id. at 20 (71-72)). He thought Marquez and Salazar were 

business partners. (Id. at 24 (87-88)). Domingo testified Marquez told him he would only be paid 

in tips, (id. at 24 (88-89)), but Marquez testified that not putting people on payroll was a practice 

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mandated by Salazar, (doc. 49-7 at 20 (71) & 22 (79-81)). Marquez testified Salazar told him not 

to put everybody on payroll (especially people without cars who were less likely to encounter the 

police) because the restaurants’ taxes would go up. (Id. at 20 (70-71) & 22-23 (80-84)). Domingo 

admitted he signed the bi-weekly payroll sheets given to the accountant. (Doc. 49-5 at 22 (78-

81)). 

Veronica Segoviano was born in Mexico and came to the United States over ten years ago. 

(Doc. 49-6 at 5 (10 & 12)). She worked at a Mexican restaurant named El Camino Real, where 

she was only paid cash or tips and never placed on the payroll. (Id. at 9-10 (27-28 & 30) & 11 

(35-37); doc. 57-2 at 7 (not disputing these facts in ¶ 39). She began working at the second El 

Portal restaurant the last week of January 2012, after Brito suggested she apply. (Doc. 49-6 at 12 

(41) & 19 (69)). She was allowed to leave the restaurant during her two hour break but usually 

stayed because she did not have a car. (Id. at 14 (48)). She testified she usually worked fifty-five 

hours per week, (doc. 49-6 at 14 (47-48)), but she never reported a problem with her pay to Salazar, 

(id. at 15 (53)). She met Marquez on her second day at work. (Id. at 13-14 (45-46)). She testified 

that, during her employment, Marquez assisted her family with the purchase of a car by getting the 

loan and car in his name and having them pay him. (Id. at 21-22 (77-78)). She quit her job the 

same day as Brito, on December 23, 2012. (Id. at 19 (69); doc. 49-3 at 17 (61)).

Castillo, Segoviano, and Brito all worked in excess of forty hours per week and received 

only tips as compensation instead of a cash wage. (Doc. 49-4 at 13 (45) & 14-15 (49-52); doc. 49-

6 at 14 (47-48) & 15 (53); doc. 49-3 at 8 (25) & 21 (74-77); doc. 60 at 3 (not disputing this fact)).

IV. Analysis

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Plaintiffs allege Defendants denied Segoviano, Brito, Castillo, and Domingo overtime pay 

and pay sufficient to meet the federal minimum wage in violation of the Fair Labor Standards Act. 

(Doc. 14 at ¶¶ 45-54). Additionally, Plaintiffs allege Defendants breached their contract with

Marquez by denying him two weeks paid vacation. (Id. at ¶¶ 57-59). Finally, Marquez and 

Domingo allege Defendants defrauded them through unfulfilled promises intended to induce them 

into continuing to work for Defendants. (Id. at ¶¶ 60-64). Both parties have moved for summary 

judgment on the FLSA claim (although only Segoviano, Brito, and Castillo seek summary 

judgment in Plaintiff’s motion), and the undersigned will address both motions in the context of 

each of that claim’s elements. Defendants have also moved for summary judgment on the breach 

of contract and fraud claims.

FLSA Claim

“To prove a violation of the minimum and overtime wage provisions of the FLSA, 

Plaintiffs must show: (1) that each was employed by Defendants during the time of the alleged 

violations; (2) enterprise or individual coverage under the FLSA; and (3) violations of the 

minimum and overtime wage requirements.” Leblanc v. USG7, LLC, No. 6:12-CV-1235-ORL41, 2015 WL 4635156, at *2 (M.D. Fla. Aug. 3, 2015) (citing 29 U.S.C. §§ 206(a) & 207(a)). 

Defendants’ motion for summary judgment disputes all of these elements to one degree or another, 

contending Plaintiffs have not established individual coverage under the FLSA and could not 

establish enterprise coverage on the facts of this case; that El Portal, Inc. and Salazar were not 

Plaintiffs’ employers; that Marquez was exempt or otherwise not entitled to overtime. (Doc. 50). 

They also allege the in pari delicto defense against all of the plaintiffs. (Id.). Plaintiffs’ motion 

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19

for summary judgment contends Plaintiffs Castillo, Segoviano, and Ramirez have met all of the 

necessary elements as a matter of law. (Doc. 51-45).

Enterprise Coverage8

“A claim for enterprise coverage requires a plaintiff to establish two elements: (1) that the 

employer or group of employers are an enterprise [as defined in 29 U.S.C. § 203(r)(1)], and (2) 

that the employer-enterprise meets the requirements of 29 U.S.C. § 203(s)(1).” Leblanc, No. 6:12-

CV-1235-ORL-41, 2015 WL 4635156, at *2. Defendants’ motion argues the two restaurants are 

not a single enterprise and, therefore, Los Portales does not meet the minimum sales requirement 

for FLSA coverage. (Doc. 50 at 15-18). Plaintiffs’ motion contends both that the two restaurants 

are a single enterprise with sales over the minimum requirements and that, because Los Portales

underreports its sales, it meets the minimum requirement by itself. (Doc. 51-45 at 12-15).

“Enterprise”

“‘Enterprise’ means the related activities performed (either through unified operation or 

common control) by any person or persons for a common business purpose,” Leblanc, No. 6:12-

CV-1235-ORL-41, 2015 WL 4635156 at *2 (quoting 29 U.S.C. § 203(r)(1)), which “requires the 

existence of [all] three [of the following] elements: (1) related activities; (2) unified operation or 

common control; and (3) a common business purpose,” id. (quoting Donovan v. Easton Land & 

Dev., Inc., 723 F.2d 1549, 1551 (11th Cir. 1984)). 

 

8 Defendants’ motion for summary judgment also argued Plaintiffs are not engaged in 

interstate commerce and, therefore, do not have individual coverage under the FLSA. (Doc. 50 at 

12-14). Plaintiffs explicitly abandon this argument for purposes of summary judgment. (Doc. 51-

45 at 15; doc. 57-2 at 14 n.1).

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The first two are easily met on the facts of this case. “Related activities” need only be “the 

same or similar” activities, id. (quoting Donovan, 723 F.2d at 1551)), which is clearly met here 

because the two restaurants both perform the same activities, i.e., running a Mexican-themed 

restaurant. (Doc. 49-9 at 6 (17), 12-13 (38, 40-43), 15 (50-51, 53)) “‘Common’ control . . . exists 

where the performance of the described activities are controlled by one person or by a number of 

persons, corporations, or other organizational units acting together.” 29 C.F.R. § 779.221. Both 

El Portal restaurants and their underlying corporations are owned and operated by the same person, 

Alvaro Salazar. (Doc. 49-9 at 12-13 (38, 40-43)). Moreover, both restaurants had the same 

general manager, Oscar Marquez. (Doc. 49-7 at 12 (40))

“Although the FLSA has not clearly defined ‘common business purpose,’ the Eleventh 

Circuit has held that ‘[m]ore than a common goal to make a profit . . . must be shown to satisfy the 

requirement.’ However, evidence that the businesses are pursuing a common business plan and 

intermingling funds is sufficient to show a common business purpose.” Leblanc, No. 6:12-CV1235-ORL-41, 2015 WL 4635156, at *4 (M.D. Fla. Aug. 3, 2015) (quoting Donovan, 723 F.2d at 

1553) (internal citations omitted). Courts have often declined to find a common business purpose

absent intermingled profits. See Cabral v. Lakes Cafe Sports Bar & Grill, Inc., No. 09-21128CIVMCALILEY, 2010 WL 1372457, at *5 (S.D. Fla. Mar. 31, 2010) (holding that, because the 

restaurants did not own each other and there was no commingling of funds or profits, there was no 

common business purpose) (citing Easton Land & Dev., Inc., 723 F.2d 1549, 1553 (11th Cir. 1984) 

(where entities did not intermingle profits, no common business purpose); Tafalla v. All Florida 

Dialysis Serv., Inc., No. 07-80396, 2009 WL 151159, *11 (S.D. Fla. Jan. 21, 2009) (where one

company made a profit from a second company, but there was no evidence of intermingling of 

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21

profits, the two companies did not have a common business purpose); Jimenez v. Southern 

Parking, Inc., No. 07-23156-CIV, 2008 WL 4279618, at *12 (S.D. Fla. Sept. 16, 2008) (no 

common business purpose where entities did not receive revenues or funding from each other)).

Plaintiffs contend El Portal and Los Portales commingled their funds and expenses and 

“ran their business as one entity,” satisfying the common business purpose requirement. 

Defendants contend the restaurants are incorporated separately and have separate bank accounts 

and, other than Marquez, Plaintiffs only claim to have worked at the second restaurant location 

run under El Portales, Inc. (Doc. 50 at 17).

It is not entirely clear what Plaintiffs’ contention that the restaurants were run “as one 

entity” means because it is not otherwise supported by evidence. The only evidence cited in their 

argument is in support of the alleged commingling of funds. (See doc. 51-45 at 13; 

doc. 57-2 at 17). That assertion is, in turn, primarily, if not exclusively, based on a single piece of 

evidence, the statements for the Bank Independent checking account Los Portales used, which, 

Plaintiffs contend, shows checks written on behalf of both restaurants. (See id.; doc. 57-8 at 10 

(¶¶ 32-34)). However, that underlying “fact” (that both restaurants wrote checks from the Bank 

Independent account) is, in fact, just another inference from the actual evidence, which shows that 

some of the checks from the Bank Independent account have “El Portal” printed above the address 

and some have “Los Portales” printed above the address. (See doc. 57-2 at 12 (¶ 9); doc. 57-8 at 

9 (¶ 28); doc. 57-17 at 4-9 (showing some checks labeled “El Portal” and some “Los Portales”); 

doc. 57-18 at 5-8 (same)). The problem for Plaintiffs’ argument is that it is undisputed in the 

record that Los Portales also ran a restaurant called “El Portal,” and the addresses on all of the 

checks is the same, the address for the second “El Portal” restaurant run by Los Portales (Doc. 49-

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22

3 at 7 (18) (stating the Los Portales, Inc. restaurant was called “El Portal”); doc. 49-9 at 13 (42-

43) (stating the corporation is “Los Portales” and the restaurant is “El Portal”); doc. 49-9 at 15 (51) 

(noting the second El Portal restaurant’s checks from the Bank Independent account were labeled 

“1315 Highway 31 Northwest, Hartselle, Alabama 35640”); doc. 57-8 at 9 (noting all the checks 

had the same address (1315 Highway 31 NW, Hartselle, AL 35640)); doc. 57-17 at 4-9 (showing 

some checks labeled “El Portal” and some “Los Portales”); doc. 57-18 at 5-8 (same)). Even 

construing this evidence favorably to the Plaintiffs for purposes of Defendants’ motion for 

summary judgment, the inference the two restaurants commingled funds is not reasonable.

The undersigned finds the two entities were not commingling funds and were not operating 

as a single enterprise.

Requirements of 29 U.S.C. § 203(s)(1)

Under the second prong of the coverage analysis, the employee must prove the employer 

“(i) has employees engaged in commerce or in the production of goods for commerce, or that has 

employees handling, selling, or otherwise working on goods or materials that have been moved in 

or produced for commerce by any person; and (ii) is an enterprise whose annual gross volume of 

sales made or business done is not less than $500,000 (exclusive of excise taxes at the retail level 

that are separately stated).” 29 U.S.C. § 203(s)(1)(A). The only aspect of this in dispute is whether 

the relevant enterprise had gross volume of sales of at least $500,000. (Doc. 50 at 15-18; 

Doc. 59 at 21-25).

Because the two restaurants were not engaged in a common business purpose, the 

enterprise is composed of only Los Portales, which did not report sales of over $500,000 any year 

between 2010 and 2013. (Doc. 49-1 at 6, 13, 21, & 29). However, Plaintiffs argue Los Portales

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has underreported its gross sales on its tax returns, which should actually be much higher. (Doc. 

51-45 at 13-14; doc. 57-2 at 15). The problem with this argument in support of their own summary 

judgment is that it is based on an expert report, which is based on documents, the authenticity of 

which Defendants have challenged based on the fact they were, for a time, not in the custody of 

the proper custodian and, in fact, in the custody of one of the plaintiffs. As addressed above in the 

discussion of Defendants’ objections to Plaintiffs’ expert report, chain of custody issues do not 

render the document inadmissible but are an issue of the weight of the evidence for the jury to 

determine. See discussion supra in Section II.B.2. As a result, for purposes of Plaintiffs’ summary 

judgment motion, the Court must take that evidence in favor of the nonmoving Defendants and 

find the evidence cannot be relied on, which, in turn, invalidates the expert’s report relying on that 

evidence. However, for purposes of Defendants’ summary judgment motion, the chain of custody 

issue points the opposite direction, and the undersigned finds the evidence reliable. Because 

Defendants did not otherwise challenge the expert report, Plaintiffs have established Los Portales 

underreported its gross sales sufficient to qualify it for enterprise coverage under the statute.

Plaintiffs have not established the relevant enterprise meets the requirements of 29 U.S.C. 

§ 203(s)(1)(A), and there is no enterprise coverage for purposes of their motion for partial 

summary judgment. Because they chose not to rely on individual coverage for purposes of their 

motion, they cannot establish the second element of their claim, and their motion for partial

summary judgment, (doc. 51), is due to be DENIED.

“Employer”

Under the FLSA, the term “‘[e]mployer’ includes any person acting directly or indirectly 

in the interest of an employer in relation to an employee . . . .” 29 U.S.C. § 203(d). “[A]n entity 

Case 5:13-cv-01395-MHH Document 72 Filed 01/12/17 Page 23 of 34
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‘employs’ a person under the FLSA . . . if it ‘suffers or permits’ the individual to work. An entity 

‘suffers or permits’ an individual to work if, as a matter of economic reality, the individual is 

dependent on the entity.” Antenor v. D & S Farms, 88 F.3d 925, 929 (11th Cir. 1996) (citing 29 

U.S.C. § 203(g); Goldberg v. Whitaker House Cooperative, Inc., 366 U.S. 28, 33 (1961)). 

Defendants’ motion asserts that, because the server plaintiffs only worked at the second restaurant 

and Salazar never had direct control over their day-to-day activities, neither of them are those 

plaintiffs’ “employers” under the statute. (Doc 50 at 18-21). Plaintiffs contend the two restaurants 

were a joint enterprise and that Salazar had sufficient control over the management of the 

restaurant to qualify as an employer under the statute. (Doc. 57-2 at 20-24). The parties’ 

arguments on Plaintiffs’ motion are redundant of their arguments on Defendants’ motion. (See

doc. 59 at 25-31; doc. 63-1 at 109).

El Portal

“An employee may have more than one employer, and ‘whether the employment by the 

employers is to be considered joint employment or separate and distinct employment for purposes 

of the act depends upon all the facts in the particular case.’” Layton v. DHL Exp. (USA), Inc., 686 

F.3d 1172, 1175 (11th Cir. 2012) (quoting 29 C.F.R. § 791.2(a)). “This case-by-case inquiry turns 

on no formula, but the court will consider factors such as control, supervision, right to hire and 

fire, ownership of work facilities, investment, and pay-roll decisions.” Cornell v. CF Ctr., LLC, 

410 F. App’x 265, 268 (11th Cir. 2011) (citing Antenor, 88 F.3d at 932 37). The factors, however, 

 

9 However, Plaintiff does not respond to Defendants’ assertion El Portal, Inc. is not an 

“employer” for purposes of the FLSA and, therefore, even if the undersigned had not 

recommended dismissal of the claims against El Portal, Inc. on the merits below, Plaintiffs would 

have abandoned this argument and not be entitled to summary judgment against it.

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should not distract from the ultimate inquiry and are “are only useful to us to the extent that they 

shed light on the existence of economic dependence.” Layton, 686 F.3d at 1181. Defendants argue 

El Portal is not a proper defendant because Brito, Castillo, Domingo, and Segoviano only worked 

at the Los Portales restaurant. (Doc. 50 at 19). Plaintiffs contend that, “due to the conflating of 

the corporate entities here, particularly the bank accounts,” there is a question of fact regarding 

whether El Portal employed the server plaintiffs. (Doc. 57-2 at 20 n.2).

Although Marquez and Salazar supervised both restaurants, they did not supervise Brito, 

Castillo, Domingo, and Segoviano at the El Portal restaurant, and Plaintiffs do not give any reason 

why, when Marquez and Salazar were making employment decisions about the server plaintiffs, 

they were doing it on behalf of El Portal and not Los Portales. (Doc. 49-3 at 7 (18-19); doc. 49-4 

at 12 (41); doc. 49-5 at 8 (25); doc. 49-6 at 10 (31)). For the same reason, there does not appear 

to be any way in which server plaintiffs’ jobs were integral to the first restaurant’s business. 

Despite having the same name, there were two separate buildings, (doc. 49-6 at 10 (31); doc. 49-

7 at 12 (39)), housing two separate restaurants, (doc. 49-6 at 10 (31); doc. 49-7 at 12 (39); doc. 49-

9 at 13 (43)), run under separate corporations, (doc. 49-9 at 12 (40-41)), which filed separate tax 

returns, (docs. 51-36 & 51-37). The primary “conflation” Plaintiffs rely on is the alleged 

commingling of the bank accounts, (doc. 57-2 at 20 n.2); however, as stated above, the evidence 

does not support this allegation. Plaintiffs’ expert explicitly acknowledged the evidence does not 

indicate where the cash deposits originated, and Plaintiffs do not point to any evidence money 

from the first restaurant was deposited in the account for the second restaurant. (Doc. 57-8 at 9-

10 (¶ 29); doc. 57-17 at 1-12; doc. 57-18 at 1-8). There is no evidence that, if the first restaurant 

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went completely out of business, it would have any effect whatsoever on Brito, Castillo, Domingo, 

and Segoviano’s employment at the second restaurant.

As a result, there is no evidence indicating that, considering the totality of the economic 

reality, Brito, Castillo, Domingo, and Segoviano were dependent on the first restaurant, run 

through El Portal, Inc. Therefore, their claims against El Portal, Inc. are due to be DISMISSED.

Alvaro Salazar

The FLSA’s definition of “employer” also includes corporate officers “with operational 

control of a corporation’s covered enterprise.” Patel v. Wargo, 803 F.2d 632, 637 (11th Cir. 1986). 

Although such personal supervisory liability requires “involve[ment] in the day-to-day operation 

or . . . some direct responsibility for the supervision of the employee,” Wargo, 803 F.2d at 638, it 

may be found indirectly through “the exercise of general supervisory powers or the exercise of 

control over other employees,” Lamonica v. Safe Hurricane Shutters, Inc., 711 F.3d 1299, 1313 

(11th Cir. 2013). In particular, the FLSA attempts to encompass “those who control a 

corporation’s financial affairs and can cause the corporation to compensate (or not to compensate) 

employees in accordance with the FLSA.” Id. (internal quotation marks omitted). Therefore, 

indirect control must be “must be both substantial and related to the company’s FLSA obligations.” 

Id. at 1314. Defendants contend Salazar was not the server plaintiffs’ direct supervisor because 

Marquez, as general manager, ran the day-to-day operations and the employees never discussed 

work with Salazar. (Doc. 50 at 20). Plaintiffs note both that a higher level of control can still 

create FLSA liability as long as there was some ultimate control over wages, and the higher level 

supervisor can still garner liability by being involved in operations on an intermittent basis. (Doc. 

57-2 at 22-23).

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Defendants’ attempt to push all of the liability for the alleged FLSA violations on Marquez 

by repeatedly listing all of Marquez’s duties over the day-to-day operation does not shield Salazar 

from liability. Even if those duties are strong evidence Marquez is an employer under the FLSA, 

Marquez’s testimony Salazar ordered him to not put some employees on the payroll and that 

Salazar “always had the last word” creates a question of fact whether Salazar had overarching 

control of the way wages and payroll were run in the restaurants. (Doc. 49-7 at 22 (78-80)). Even 

if he never spoke to the employees directly about their work, if, through Marquez, he controlled 

the way the day-to-day operation was run (especially regarding the alleged payroll violations), he 

is an employer under the FLSA. See Lamonica, 711 F.3d at 1313-14. Because there is a question 

of fact as to the control Salazar exercised over the restaurants, the parties’ cross-motions for 

summary judgment on the claims against Salazar are due to be denied on this ground.

Oscar Marquez

Defendants also argue Marquez was the server plaintiffs’ employer and should be realigned 

as a defendant. (Doc. 50 at 21). Plaintiffs respond that Marquez was not an employer because 

Salazar retained strict control over Marquez’s actions on a day-to-day basis. (Doc. 57-2 at 24-25). 

Although there does appear to be a question of fact as to who the server plaintiffs’ employers were, 

it is irrelevant whether Marquez was. Plaintiffs are masters of their own complaint and have “the 

option of naming only those parties the plaintiff[s] choose[] to sue, subject only to the rules of 

joinder [of] necessary parties.” Lincoln Prop. Co. v. Roche, 546 U.S. 81, 91 (2005) (quoting 16 J. 

Moore et al., Moore’s Federal Practice § 107.14[2][c], p. 107–67 (3d ed. 2005)). Even if Marquez 

is an employer under the FLSA, Plaintiffs need not bring such a claim against him. If Marquez is 

liable for the FLSA violations and Salazar is not, it is Plaintiffs’ prerogative to risk recovering 

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from neither over attempting to recover from Marquez. Moreover, Defendants cite no authority 

for, and make no procedural argument in support of, the proposition Marquez should be realigned 

as a party-defendant.

Violations of the Minimum and Overtime Wage Requirements

Oscar Marquez

Defendants’ motion contends Marquez is not entitled to unpaid minimum wage or overtime 

pay because he is an exempt salaried employee under the FLSA and, even if he were not, the 

amount he was paid was sufficient to pay him minimum wage and overtime. (Doc. 50 at 23-26). 

Plaintiffs respond there is a question of fact whether his primary duty was management and, at 

least during the last six months of employment, he was not paid the minimum amount required to 

be exempt. (Doc. 57-2 at 26-29).

An employee is an exempt executive employee if he is

(1) Compensated on a salary basis at a rate of not less than $455 per week (or $380 

per week, if employed in American Samoa by employers other than the Federal 

Government), exclusive of board, lodging or other facilities;

(2) Whose primary duty is management of the enterprise in which the employee is 

employed or of a customarily recognized department or subdivision thereof;

(3) Who customarily and regularly directs the work of two or more other 

employees; and

(4) Who has the authority to hire or fire other employees or whose suggestions and 

recommendations as to the hiring, firing, advancement, promotion or any other 

change of status of other employees are given particular weight.

29 C.F.R. § 541.100. See also 29 U.S.C. § 213(a)(1) (“The [minimum wage and maximum hour 

provisions of the FLSA] shall not apply with respect to “any employee employed in a bona fide 

executive . . . capacity . . . .”). 

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Plaintiffs contend Marquez’s primary duties were not management because “every 

decision” required a call to Salazar. (Doc. 57-2 at 28). Whether management is a “primary duty” 

requires consideration of “[1] the relative importance of the exempt duties as compared with other 

types of duties; [2] the amount of time spent performing exempt work; [3] the employee’s relative 

freedom from direct supervision; and [4] the relationship between the employee’s salary and the 

wages paid to other employees for the kind of nonexempt work performed by the employee.” 29 

C.F.R. § 541.700; accord Rodriguez v. Farm Stores Grocery, Inc., 518 F.3d 1259, 1264 (11th Cir. 

2008) (including, in addition, “the frequency with which an employee may exercise discretionary 

powers”). At least until the last two years of his employment, Marquez had standing permission 

to pay suppliers, (doc. 49-7 at 22 (78)), could hire and fire employees, (id. at 12 (41)), set work 

schedules, (id. at 12-13 (41-42)), and handled the restaurant’s business records, (id. at 13-14 (45-

46)). He also performed these functions for the other restaurant, (id. at 49-7 at 12 (40)), and was 

paid considerably more than the nonexempt employees because his salary equated to over twice 

minimum wage, (id. at 33 (123)). However, there are questions of fact as to the extent to which 

he was allowed to exercise discretion when performing his duties. He testified that Salazar always 

had the last word on “problems, paperwork,” “personnel change[s],” down to whether a chef who 

cut his finger should go to the hospital or get a Band-Aid. (Doc. 49-7 at 22 (78-79)). Even when 

Marquez hired new employees, he would confirm with Salazar whether to put them on payroll. 

(Id. at 22 (79-80)). Because there are questions of fact on issues underlying whether and when 

Marquez met the executive exemption requirements, the undersigned cannot, when considering 

the evidence in Plaintiffs’ favor, find Marquez was exempt; therefore, his claims under the FLSA 

are not due to be dismissed on this ground.

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Defendant also specifically argues Marquez is not entitled to overtime because he testified 

he only worked forty hours per week. (Doc. 50 at 26). In their response, Plaintiffs note he also 

testified to “sometimes” going over by “two or three hours.” (Doc. 57-2 at 27 n.5). In the context 

of Marquez’s deposition, and viewed most favorably to the Plaintiffs, the latter modifies the 

former, which is not a denial Marquez worked uncompensated overtime but a general statement 

of Marquez’s usual schedule. (See doc. 57-3 at 46-47 (177-178)). Defendants’ motion is due to 

be denied as to Marquez’s overtime claims.

In Pari Delicto Defense

Defendants contend any recovery by the plaintiffs is barred by the in pari delicto defense, 

which forecloses recovery of damages by a plaintiff who has participated in the wrongdoing of 

which he or she complains. (Doc. 50 at 26-27). In support, they allege Marquez bears sole 

responsibility for the FLSA violations due to his management responsibilities, while the other 

plaintiffs are complicit in Marquez’s violations for failing to report them to Salazar. (Doc. 50 at 

27). Plaintiffs argue the in pari delicto defense is inapplicable because Marquez does not bear 

essentially equal responsibility for the FLSA violations, none of the plaintiffs besides Marquez 

actually violated the FLSA themselves, and, in any event, applying the defense would frustrate the 

purpose of the FLSA—protecting employees from exploitation by their employers. (Doc. 57-2 at 

29-31). 

The in pari delicto defense bars recovery under a federal statute “only where (1) the 

plaintiff bears at least substantially equal responsibility for the violations he seeks to redress, and 

(2) preclusion of the suit would not substantially interfere with the statute’s policy goals.” 

Lamonica, 711 F.3d at 1308. Under the first prong of the in pari delicto inquiry, the question is 

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whether the plaintiff is “an active, voluntary participant in the unlawful activity that is the subject 

of the suit.” Id. at 1309 (quoting Pinter v. Dahl, 486 U.S. 622, 636 (1988)) (emphasis in original). 

Applying the first prong of the in pari delicto defense to Marquez,

10 Defendants attempt to 

conflate the FLSA violation he claims with the FLSA violation the servers claim. In order for the 

in pari delicto defense to bar Marquez’s recovery, Defendants need to demonstrate not that 

Marquez participated in underpaying the servers but that he participated in underpaying himself.

See Lamonica, 711 F.3d at 1309 (emphasizing the relevant inquiry is the unlawful activity alleged 

by the plaintiff, “not just any causal relationship or topical connection”). In any event, even if 

Marquez’s participation in the FLSA violations alleged by the servers suffices for his in pari 

delicto complicity, the undersigned cannot say the facts viewed in the light most favorable to the 

plaintiffs regarding control of the restaurant support an equal degree of responsibility for Marquez

(as opposed to Salazar) for the FLSA violations. See discussion supra at Section IV.A.2.b.

Defendants’ argument as to the first prong of the in pari delicto defense for Segoviano, 

Brito, Domingo, and Castillo is even more tenuous. Defendants argue failing to report FLSA 

violations is a part of the unlawful activity and the equitable equivalent of failing to pay overtime 

or a minimum wage, and thus the server plaintiffs’ recovery is barred. Again, though, the question 

is not whether there is a causal connection between the wrongful activity alleged by a defendant 

and the subject of the suit; the question is whether the activity itself is “the subject of the suit.” 

The FLSA violation alleged by the servers is the failure by their employer(s) to pay them consistent 

with the FLSA, not their failure to be placed on the payroll. In addition, taking inferences 

 

10 As stated supra, Plaintiffs do not seek summary judgment for the claims against 

Marquez, so the facts are construed favorably to Marquez for purposes of this section.

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favorably to the Plaintiffs, Salazar knew of and directed the FLSA violations, so at a minimum a 

factual dispute exists as to the degree of responsibility for the violations between the servers and 

Salazar sufficient to deny Defendants summary judgment on the defense.

Under the second prong of the in pari delicto defense, the question is whether the policy 

goals of the statute at issue would be offended by applying the defense. Among the FLSA’s policy 

goals is employer deterrence, and “[w]here . . . an employer knew or had reason to know that its 

employee underreported his hours, it cannot invoke equitable defenses based on that 

underreporting to bar the employee’s FLSA claim.” Bailey v. TitleMax of Georgia, Inc., 776 F.3d 

797, 804-05 (11th Cir. 2015).

Even if Defendants had demonstrated participation in and substantially equal responsibility 

for the violations by either the server plaintiffs or Marquez, however, Defendants have made no 

argument as to the second prong of the in pari delicto defense. Thus, they have failed to establish 

an element of the defense with respect to any plaintiff. Even assuming arguendo Defendants had 

offered a policy argument in their motion for summary judgment, to the extent knowledge of the 

server plaintiffs’ FLSA violations are imputed to their employer—which, for the purposes of 

Defendants’ motion, is both Salazar and Los Portales—the Eleventh Circuit has explicitly 

foreclosed the availability of the in pari delicto defense. TitleMax, 776 F.3d at 805. 

Breach of Contract

Defendants argue Marquez has offered no evidence he was owed two weeks of paid 

vacation and thus cannot support his claim for breach of contract. 11 (Doc. 50 at 28). The only 

 

11 Plaintiffs also assert a breach of contract claim for Defendants’ alleged failure to 

compensate them commensurate with the FLSA. (Doc. 14 at ¶¶ 56, 58-59). Defendants do not 

address this portion of Plaintiffs’ breach of contract claim in their motion.

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reference Plaintiffs make to the breach of contract claim for the two weeks paid vacation allegedly 

owed to Marquez in their response is a footnote in which they simply restate the allegation in the 

complaint. (Doc. 57-2 at 27-28 n.5). Plaintiffs do not actually acknowledge Defendants’ argument 

at all, much less point to evidence to rebut Defendants’ claim. As a result, this claim is abandoned. 

See Coalition for the Abolition of Marijuana Prohibition v. City of Atlanta, 219 F.3d 1301, 1326 

(11th Cir. 2000) (“The appellants’ failure to brief and argue this issue during the proceedings 

before the district court is grounds for finding that the issue has been abandoned.”); Resolution 

Trust Corp. v. Dunmar Corp., 43 F.3d 587, 599 (11th Cir. 1995) (dismissing undefended claims 

on summary judgment); Hudson v. Norfolk S. Ry. Co., 209 F. Supp. 2d 1301, 1324 (N.D. Ga. 2001) 

(“When a party fails to respond to an argument or otherwise address a claim, the Court deems such 

argument or claim abandoned.”).

Fraud

Defendants’ motion for summary judgment contends Plaintiffs have failed to allege 

fraudulent conduct or reliance with the specificity required under Rule 9 of the Federal Rules of 

Civil Procedure, or to offer any evidence of fraudulent conduct by any of Defendants. (Doc. 50 at 

28). Plaintiffs do not mention this claim in their opposition to Defendants’ motion. (See doc. 57-

2; doc. 60 at 13). Thus, this claim is also abandoned.

V. Recommendation

The undersigned RECOMMENDS Defendants’ motion for summary judgment be 

GRANTED IN PART to the extent it seeks dismissal of Marquez’s breach of contract claim for 

unpaid vacation, Plaintiffs’ fraud count, and all claims against El Portal, Inc.; and DENIED IN 

PART to the extent it seeks other relief.

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The undersigned FURTHER RECOMMENDS Plaintiffs’ motion for summary judgment 

be DENIED. 

VI. Notice of Right to Object

Pursuant to 28 U.S.C. § 636(b)(1)(C) and Rule 72(b)(2), Fed. R. Civ. P., any party may file 

specific written objections to this report and recommendation within fourteen (14) days from the 

date it is filed in the office of the Clerk. Failure to file written objections to the proposed findings 

and recommendations contained in this report and recommendation within fourteen (14) days from 

the date it is filed shall bar an aggrieved party from attacking the factual findings on appeal, except 

for plain error. Written objections shall specifically identify the portions of the proposed findings 

and recommendation to which objection is made and the specific basis for objection. A copy of 

the objections must be served upon all other parties to the action. If objections are filed, the 

opposing party has ten (10) additional days to file a response to the objections.

DONE this 12th day of January, 2017.

_______________________________

JOHN H. ENGLAND, III

UNITED STATES MAGISTRATE JUDGE

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