Court Opinion

ID: 9947041
Source: CourtListenerOpinion
Date Created: 2024-03-01 21:09:08.450885+00
Date Added: 2024-06-11T14:25:45.718700
License: Public Domain

Malcher v Theatre Refreshment Co. of N.Y.
               2024 NY Slip Op 30605(U)
                   February 27, 2024
           Supreme Court, New York County
        Docket Number: Index No. 150046/2023
               Judge: Dakota D. Ramseur
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
 Op 30001(U), are republished from various New York
 State and local government sources, including the New
  York State Unified Court System's eCourts Service.
 This opinion is uncorrected and not selected for official
                       publication.
                                                                                                 INDEX NO. 150046/2023
  NYSCEF DOC. NO. 36                                                                       RECEIVED NYSCEF: 02/27/2024

                             SUPREME COURT OF THE STATE OF NEW YORK
                                       NEW YORK COUNTY
            PRESENT:        HON. DAKOTA D. RAMSEUR                              PART                           34M
                                                                    Justice
            ---------------------·------------- -----X                         INDEX NO.         150046/2023
             OLAF MALCHER,
                                                                               MOTION DATE            NIA
                                                Plaintiff,
                                                                               MOTION SEQ. NO.        001
                                        - V -

             THEATRE REFRESHMENT CO. OF NEW YORK, LENNY
                                                                                  DECISION + ORDER ON
             LOWENGRUB
                                                                                         MOTION
                                                Defendant.
                          ·----------------------------------------------X

            The following e-filed documents, listed by NYSCEF document number (Motion 001) 11, 12, 13, 14, 15,
            16, 17, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31
            were read on this motion to/for                             ORDER MAINTAIN CLASS ACTION

                    In January 2023, plaintiff OlafMalcher commenced this Labor Law class action against
            his employer, Theatre Refreshment Co. of New York, and its owner and CEO, Lenny
            Lowengrub. He alleges that defendants failed to pay New York's basic minimum wage and
            provide a proper wage statement, improperly (and without sufficient notice) claimed a tip credit
            for his work, and unlawfully retained gratuities belonging to employers. In addition, plaintiff
            alleges that defendants retaliated against him after complaining about these policies and
            practices. His causes of action arise under§§ 146-1.3, 146-2.2, and 146-2.9 of the New York
            Code, Rules, and Regulations Law and§§ 195.3, 196-d, 215, and 652 of the New York Labor
            Law. In this motion sequence (001 ), which defendants oppose, plaintiff moves pursuant to CPLR
            901 and 902 for class certification. The proposed class consists of "all individuals who have
            worked for Theatre Refreshment Co. of New York as a bartender, server, and/or other
            comparable tipped position in New York at any time from January 2, 2017, to the present."
            (NYSCEF doc. no. 16 at L proposed notice to class.) For the following reasons, plaintiff's
            motion is granted.

                                                             BACKGROUND

                   Plaintiff has worked as a bartender with the Theatre Refreshment Co. of New York since
            approximately December 2012. During this time, he has bartended numerous Broadway
            performances at various theaters. From 2017 through March 2020, when Broadway closed due to
            the COVID-19 pandemic, plaintiff primarily worked at the Majestic Theatre, which housed
            "Phantom of the Opera." (NYSCEF doc. no. 17 at 19, Malcher affidavit.) While there, he
            worked an average of 3 hours and 45 minutes per shift. In September 2021, after Broadway
            reopened, they assigned him to the Gerald Schoenfeld Theatre for performances of "Come From
            Away." (Id. at 110.) From October 4, 2022, until January 15, 2023, he bartended at the Lyceum
            Theatre. (Id. at 1 11.) At both the Gerald Schoenfeld and Lyceum Theatres, since the

             150046/2023 MALCHER, OLAF vs. THEATRE REFRESHMENT CO. OF NEW YORK ET AL             Page 1 of 5
             Motion No. 001

[* 1]                                                          1 of 5
                                                                                                      INDEX NO. 150046/2023
  NYSCEF DOC. NO. 36                                                                         RECEIVED NYSCEF: 02/27/2024

           performances did not have intermissions, plaintiff worked on average 2 hours and 15 minutes per
           shift. (Id. at ,-i,-i 10-11.) Thereafter, he worked at the Shubert Theatre from January 16, 2023, to
           May 14, 2023, and the Barrymore Theatre from May 15, 2023, onward. (Id. at ,-i,-i 12-13.) At
           these theaters, plaintiff worked average shifts of 3 hours 45 minutes and 3 hours 30 minutes,
           respectively. (Id.) He avers that he regularly worked eight shifts per week throughout his
           employment at each theater. (Id. at ,-i 14.) In addition to the time spent bartending, plaintiff
           alleges that he was required to spend 45 to 75 minutes per shift setting up, preparing/restocking
           for intermission, and breaking down the theaters' bars. (Id. at ,-i 16.)

                   Per the collective bargaining agreement between plaintiff's union (the United Food and
           Commercial Workers Union Local 1245, AFL-CIO) and defendants, effective from January 1,
           2017, to December 31, 2020, plaintiff was compensated at a piece rate of $23. 7 5 per shift, rising
           each year by $.50 per shift until 2019. (Id. at ,-i 18; NYSCEF doc. no. 23 at 2-3, collective
           bargaining agreement.) So, while in 2017, he was paid $23.75 per shift and $190 per week for
           eight shifts, in 2018 and 2019, the piece rate increased to $24.25 and $24.75, and total
           compensation per week to $194 and $198. (Id.; NYSCEF doc. no. 17 at,-i18.) In 2020, the parties
           agreed to a new collective bargaining agreement, in which the piece rate increased by 2.5%
           percent each year from 2020-2023. (See NYSCEF doc. no. 23 at 13-14.) As such, plaintiff avers
           that he was paid $202.95 per week in 2020, $208 in 2021, and $213.20 in 2022. (NYSCEF doc.
           no. 17 at ,-i 18.) Accounting for the number of hours worked per week, however, plaintiff
           calculates he was compensated at an effective hourly rate between $6.30 and $7 from 2017
           through 2021, and between $11.50 and $11.84 onward-all of which are rates below New
           York's basic minimum wage. (NYSCEF doc. no. 17 at ,-i 18.) In addition, plaintiff alleges that
           defendants neither advised him that they were taking a tip credit nor provided him with accurate
           wage statements reflecting such credits. (NYSCEF doc. no. 1 at ,-i 41, 51.) Lastly, he alleges that
           defendants operated an unlawful tip pool, in which bar managers-who exercised significant
           authority over employees by authorizing them to clock out, counting and distributing tips, and
           disciplining employees-participated in and received an equal portion of the tips as the
           bartenders themselves. (Id. at ,-i 15.)

                   As to the putative class, in his affidavit, plaintiff alleges (and defendants do not deny)
           that Theatre Refreshment operates concession stands at 18 different Broadway theaters, each
           having at least two bartenders at all times. (Id. at ,-i 24.) Accordingly, plaintiff estimates that the
           potential class of employees harmed by defendants' compensation policies under the collective
           bargaining agreements includes at least 60 individuals. (Id.)

                   On the instant motion, plaintiff contends he has demonstrated the five prerequisites-
           numerosity, commonality, typicality, representative, and superiority----enumerated by CPLR 901
           and 902 for class certification. In opposition, defendants contend that (1) the collective
           bargaining agreements' grievance procedures require plaintiff to submit this matter (and all class
           claims) to an arbitrator, (2) if the Court is to grant class certification, the class must be limited
           solely to bartenders-not servers or other tipped employees-and (3) the class may not seek
           statutory penalties for alleged violations of New York Labor Law. As described below, the Court
           finds argument ( 1) unpersuasive but modifies the definition of the proposed class based on
           arguments (2) and (3).

            150046/2023 MALCHER, OLAF vs. THEATRE REFRESHMENT CO. OF NEW YORK ET AL                   Page 2 of 5
            Motion No. 001

[* 2]                                                       2 of 5
                                                                                                     INDEX NO. 150046/2023
  NYSCEF DOC. NO. 36                                                                         RECEIVED NYSCEF: 02/27/2024

                                                        DISCUSSION

                    CPLR 902 provides that a class action may only be maintained if the five prerequisites
            promulgated by CPLR 901 (a) are met. (Pludeman v Northern Leasing Sys., Inc., 74 AD3d 420,
            421 [1st Dept 2010]; CPLR 902.) These prerequisites are: (a) (1) the class is so numerous that
            joinder of all members is impracticable (numerosity); (2) questions of law or fact common to the
            class predominate over questions of law or fact affecting individual class members
            (commonality); (3) the claims or defenses of the class representatives are typical of those in the
            class (typicality); (4) the class representatives will fairly and accurately protect the interest of the
            class; and (5) a class action represents the superior method of adjudicating the controversy
            (superiority). (Id.; CPLR 901 [a].)

                    The party seeking class certification bears the burden of establishing the prerequisites
            provided by CPLR 901 (a) by tendering evidence in admissible form. (Weinstein v Jenny Craig
            Operations, Inc., 138 AD3d 546, 547 [1st Dept 2016]; Kudinov v Kel-Tech Constr. Inc., 65
            AD3d 481,481 [1st Dept 2009].) Conclusory allegations are insufficient to satisfy the moving
            party's burden. (Feder v Staten Island Hosp., 304 AD2d 470,471 [1st Dept 2003]; Pludeman, 74
            AD3d at 422.) Whether these prerequisites have been met and, thus, whether a lawsuit qualifies
            as a class action, rests within this Court's sound discretion. However, the Court must be mindful
            that class certification should be liberally construed. (Kudinov, 65 AD3d at 481.). (Kudinov, 65
            AD3d at 481.) In doing so, the Court recognizes that "claims for uniform systemwide wage
            violations are particularly appropriate for class certification" since the cost of litigating
            individually often outweighs the value of the individual's claim. (Andryeyeva v New York Health
            Care, Inc., 33 NY3d 152, 184 [2019].) Here, plaintiff has undoubtedly met each of CPLR 901 's
            prerequisites.

                    While there is neither a "mechanical test" to determine whether a proposed class is so
            numerous as to make joinder of all members impractical nor a predetermined minimum number
            of class members to satisfy the rule, courts routinely grant class certification when there are
            around 40 members. (See Borden v 400 E. 55th St. Assoc., LP., 24 NY3d 382,399 [2014]
            [finding CPLR 901 mirrors Rule 23 of the Federal Rules of Civil Procedure, whereby
            "numerosity is presumed at a level of 40 members"], citing Consol Rail Corp. v Town of Hyde
            Park, 47 F3d 473,483 [2d Cir. 1995]; Caesar v Chemical Bank, 66 NY2d 698, 700 [1985]
            [affirmed a lower court's grant of class certification in a class consisting of 39 bank employees];
            Globe Surgical Supply v GEICO Ins. Co., 59 AD3d 129, 137-138 [2d Dept 2008] [finding
            numerosity requirement satisfied where the proposed class was "at a minimum between 1O and
            100 [class members]"].) Plaintiffs estimation that the proposed class consists of at least 60
            members clearly meets the above threshold and is supported by (1) sworn testimony based on his
            work at five of defendants' 18 theaters over six years, and (2) two collective bargaining
            agreements that cover the remaining 13 theaters. Defendants have not proffered any reason to
            believe the actual number of class members is any lower. Similarly, the Court finds that
            questions of fact and law common to the class-whether defendants paid minimum wage,
            properly took wage credits, gave notice thereof, and operated an unlawful tip pool-predominate
            over any questions raised by particular individuals. Same for the typicality prerequisite: plaintiff

             150046/2023 MALCHER, OLAF vs. THEATRE REFRESHMENT CO. OF NEW YORK ET AL                  Page 3 of 5
             Motion No. 001

[* 3]                                                       3 of 5
                                                                                                      INDEX NO. 150046/2023
  NYSCEF DOC. NO. 36                                                                        RECEIVED NYSCEF: 02/27/2024

           has demonstrated that his claims and those of the proposed class arise out of a common business
           practice or course of conduct. Lastly, defendants do not suggest that plaintiff cannot adequately
           represent the interests of the class or proffer a reason why class action is not the super method for
           resolving this dispute.

                    As described above, defendants' opposition is based on the collective bargaining
           agreements, which purport to require plaintiff-as a union member-to submit to mandatory
           arbitration. The relevant language is identical in both agreements and provides:

                          "(A) In the event a dispute shall arise concerning the meaning or
                          application of any term, condition, rule or regulation arising out of
                          or in connection with this Agreement, or in connection with a
                          discharge of an employee, said dispute or grieve will be resolved in
                          the following manner: (B) Through discussion between the
                          Employer and Union, then if a solution is not reached within five (5)
                          days, either party may cause the matter to be submitted for
                          arbitration ... The decision of the arbitrator shall be final and binding
                          upon both parties." (NYSCEF doc. no. 23 at 3, 15.)

                   Critically, this arbitration provision requires plaintiff to use the enumerated procedures
           only in a dispute "concerning the meaning or application of any term, condition, rule or
           regulation" arising out of the agreement; in other words, the provision does not apply to claims
           arising from statutory violation under the New York Labor Law. Where a collective bargaining
           agreement does not "clearly and unmistakably" waive the employees' statutory right to a judicial
           forum, plaintiff-employees are not obligated to arbitrate their statutory claims. (Conde v Yeshiva
           Univ., 16 AD3d 185, 186 [1st Dept 2005], citing Wright v Universal Mar. Serv. Corp., 525 US
           70, 80 [1998]; Lawrence v Sol G Atlas Realty Co., Inc., 841 F3d 81, 83 [2d Cir 2016] [holding
           that the "clear and unmistakable" standard requires "specific references in the CBA either to the
           statutes in question or to statutory causes of action generally."]) Since the above arbitration
           requirement does not reference the Labor Law or statutory causes of action more generally,
           plaintiff is not precluded from asserting his statutory rights in this judicial forum.

                   Notwithstanding the above, at this juncture, the Court limits the definition of the
           proposed class to "all individuals who have worked for Theatre Refreshment Co. of New York as
           bartenders in New York at any time from January 2, 2017, to the present." The previous
           definition included "server[s], and/or other comparable tipped position[s]." The collective
           bargaining agreement defines covered employees as "bartenders who work in concessions
           operated." (NYSCEF doc. no. 23 at 1.) Moreover, plaintiffs factual allegations are limited to
           defendants' compensation policies as they relate to bartenders and whether, in using the piece
           rate under the CBA, defendants compensated them above minimum wage. Plaintiffs complaint
           and affidavit offer no allegations of whether servers or other staff did not receive a minimum
           wage. Defendants' further position-that the class should limit the class to bartenders who
           worked for defendants after January I, 2020, when the second collective agreement became
           effective-has no merit. Plaintiff has alleged Labor Law violations under both bargaining
           agreements. Lastly, plaintiff acknowledges that he cannot seek statutory penalties in this class

            150046/2023 MALCHER, OLAF vs. THEATRE REFRESHMENT CO. OF NEW YORK ET AL                   Page 4 of 5
            Motion No. 001

[* 4]                                                      4 of 5
                                                                                                    INDEX NO. 150046/2023
  NYSCEF DOC. NO. 36                                                                          RECEIVED NYSCEF: 02/27/2024

            action and does not oppose defendants' argument that any mention of statutory penalties must be
            removed from the class notice.

                    Accordingly, for the foregoing reason, it is hereby

                   ORDERED that plaintiff OlafMalcher's motion for class certification pursuant to CPLR
            901 and 902 is granted; and it is further

                     ORDERED that this action is certified as a class action, with the class being defined as
            follows: "All non-exempt employees who have worked for Theatre Refreshment Co. of New
            York and Lenny Lowengrub as bartenders at any time from January 2, 2017, to the present"; and
            it is further

                     ORDERED that plaintiff Malcher is appointed Lead Plaintiff and Class Representative;
            and it is further

                   ORDERED that Douglas B. Lipsky, Esq., of Lipsky Lowe LLP, shall serve as class
            counsel; and it is further

                   ORDERED that counsel for the Class submit to the Court for its approval the text of a
            proposed Notice to the Class, including an opt-out provision, that adheres to the class definition
            described above within thirty (30) days; and it is further

                   ORDERED that counsel for the parties shall appear at 60 Centre Street, Courtroom 341,
            New York, New York at 9:30 a.m. on March 12, 2024, for a preliminary conference with the
            Court; and it is further

                    ORDERED that counsel for plaintiffs shall serve a copy of this order, along with notice
            of entry, on all parties within ten (I 0) days of entry.

                    This constitutes the Decision and Order of the Court.

                    2/27/2023
                      DATE                                                     DAKOTA D. RAMSEUR, J.S.C.
             CHECK ONE:                  CASE DISPOSED                    NON-FINAL DISPOSITION

                                         GRANTED         □ DENIED         GRANTED IN PART          □ OTHER
             APPLICATION:                SETTLE ORDER                     SUBMIT ORDER

             CHECK IF APPROPRIATE:       INCLUDES TRANSFER/REASSIGN       FIDUCIARY APPOINTMENT    □ REFERENCE

             150046/2023 MALCHER, OLAF vs. THEATRE REFRESHMENT CO. OF NEW YORK ET AL                Page 5 of 5
             Motion No. 001

                                                           5 of 5
[* 5]