Alvarez v. 9ER’s Grill @ Blackhawk, L.L.C.

In November of 2008 Alvarez went to the Department of Labor (“DOL”) to complain about the lack of overtime pay. Alvarez identified the establishment about which she was complaining as 9ER’s Grill, 1315 Grand Parkway, Katy, Harris County, Texas, and identified Mr. Ali Qattom and Mrs. Ghapa Qattom as the owners of the establishment. Qattom met with a DOL investigator and agreed to pay back wages to Alvarez. The funds to pay the back wages to Alvarez came from Jaser and 9ER’s Grill @ Blackhawk. Since Jaser was out of the country at the time, Qattom “handled the making of the payment [ ].” Alvarez received a cashier’s check for $1,690, but never signed any forms or receipts for the check. The Court denied Defendants’ Motion, finding that under the circumstances, Plaintiff did not waive her right to pursue a private right of action, simply by cashing a check issued by Defendants, resulting from the prior DOL investigation.

Addressing the settlement/waiver issue the Court stated,

“Defendants Jaser and 9ER’s Grill @ Blackhawk contend that they are entitled to summary judgment because Alvarez settled any FLSA claim that she may have against them by accepting payment made at the conclusion of an investigation by the DOL.

(a) Applicable Law

The FLSA provides for a waiver of an additional recovery when settlement payments have been supervised by the Secretary of Labor. 29 U.S.C. § 216(c). For such a waiver to be valid, the employee must agree to accept the payment that the Secretary determines to be due and there must be payment in full. See Sneed v. Sneed’s Shipbuilding, Inc., 545 F.2d 537 (5th Cir.1977). In Sneed, 545 F.2d at 539, the court held there was adequate supervision where the DOL official investigated the claim for back wages, determined the amount owed the employee, presented the check to the employee on the employer’s behalf, and required the employee to sign a receipt waiving his right to sue. Id. 545 F.2d at 538-40.

(b) Application of the Law to the Facts

Citing the Back Wages Disbursement and Pay Evidence Instructions that they received from the DOL, defendants argue that Alvarez’s claims “are barred by settlement of the claims prior to the filing of this lawsuit.” The DOL Back Wages Disbursement and Pay Evidence Instructions instructed the employers “to make the full payment of back wages by 09/03/2008 …” and also instructed the employers to “Send the Wage and Hour Division copies of the signed WH-58 Receipt Form to the Houston TX District Office as they are returned to you.” Alvarez states in her declaration, “I received a cashiers check in certified mail. There was nothing in the envelope with the check. I was never asked to sign any forms to receive my check. I did not sign any forms to receive my check.” Defendants do not dispute Alvarez’s statements that she neither received nor signed any form releasing her right to bring this action. Instead, Jaser states in his affidavit that

[t]he payments would not have been made if we had realized that the Plaintiff [ ] would take the money and then file a lawsuit … Based on the DOL material provided to us, it was my understanding the Plaintiffs were provided with a release and knew that by cashing the checks each was releasing any claims against each of their respective employers.

Because defendants have failed to present any evidence that they either provided Alvarez a form WH-58 to sign, or that Alvarez ever signed such a form releasing her FLSA claims, the court is not persuaded that her claims against Jaser and/or 9ER’s Grill @ Blackhawk are barred by settlement of the claims prior to the filing of this action.

(c) Conclusions

For the reasons explained above, the court concludes that 9ER’s Grill @ Blackhawk and 9ER’s Grill @ 359 are subject to enterprise treatment under the FLSA, and that neither Jaser nor 9ER’s Grill @ Blackhawk has presented evidence showing that the claims asserted against them in this action are barred by prior settlement.”