Pursuant to CPLR 2219 (a), the following papers were read on this motion:
NYSCEF Doc Nos. 16 — 25, 27, 30 — 38, and 42.

Plaintiffs brought this class action on behalf of themselves and similarly situated employees, claiming defendants violated New York Labor Laws and Labor Department regulations, by withholding gratuities or other monies intended for defendants' employees. Specifically, plaintiffs claim that an "Administrative Fee" charged by defendants to defendants' customers for special events, were actually gratuities intended for defendants' workers, and that defendants then unlawfully withheld those monies.

Defendants previously moved to dismiss the original Complaint in this action. At that juncture, upon the consent of all parties, all plaintiffs discontinued their claims against defendant GM 57TH Street, LLC, plaintiff Daniel Luna discontinued his individual claims against defendants, and the motion to dismiss was withdrawn. Thereafter, plaintiffs served and filed an Amended Complaint, which added plaintiff Sade Bess and defendant GG W38 LLC d/b/a/ Nearly Ninth. Defendants now move to dismiss the Amended Complaint pursuant to CPLR 3211 (a) (1) and (7). For the reasons set forth below, the motion is granted in part and denied in part.

Employers are prohibited from retaining "any part of a gratuity or of any charge purported to be a gratuity for an employee" (Labor Law § 196-d). When determining whether a charge is to be considered a gratuity, "[t]here shall be a rebuttable presumption that any charge in addition to charges for food, beverage, lodging, and other specified materials or services . . . is a charge purported to be a gratuity" (12 NYCRR § 146-2.18 [b]). Additionally, 12 NYCRR § 146-2.19 (a) states that "[a] charge for the administration of a banquet, special function, or package deal shall be clearly identified as such and customers shall be notified that the charge is [*2]not a gratuity or tip."

There is no dispute that in addition to charges for food, beverage, lodging, and other specified materials or services, defendants did in fact charge their customers an "Administrative Fee" for special events. Thus, pursuant to 12 NYCRR § 146-2.18 (b), there is a rebuttable presumption here that these Administrative Fees were gratuities.

Defendants first argue that the documentary evidence submitted in support of the motion demonstrates that plaintiffs do not state a valid claim under Labor Law § 196-d. Specifically, defendants argue that that the documentary evidence shows that the administrative fees charged by defendants were not gratuities, and that they have met their burden to rebut any presumption created by 12 NYCRR § 146-2.18 (b). Defendants have provided a copy of a contract from one of their special events. The third page of these contracts contains a paragraph that states:

10. Administrative fee*: A 23% Administrative Fee will be added to your bill. This Administrative Fee is not a gratuity and is not distributed in whole or in part to any service employee who worked at your event. Rather the Administrative Fee is retained by the Company to offset administrative and operational costs associated with your event.

(Emphasis in original.) This paragraph is within the two and a half pages of other terms and conditions contained in the contracts.

Defendants claim that by this contractual provision, the Administrative Fee(s) they charged cannot be deemed a gratuity as a matter of law, and that they have met their notification requirements under 12 NYCRR § 146-2.19. Specifically, defendants argue that this section satisfies their burden under 12 NYCRR § 146-2.19 (b) that the required notification be "sufficient to ensure that a reasonable customer would understand that such charge was not purported to be a gratuity."

However, 12 NYCRR § 146-2.19 (c) sets forth additional requirements for what would constitute adequate notification under that regulation. Specifically, the regulation states that:

Adequate notification shall include a statement in the contract or agreement with the customer, and on any menu and bill listing prices, that the administrative charge is for administration of the banquet, special function, or package deal, is not purported to be a gratuity, and will not be distributed as gratuities to the employees who provided service to the guests. The statements shall . . . appear in a font size similar to surrounding text, but no smaller than a 12-point font.

(12 NYCRR § 146-2.19 [c]; emphasis added)

Aside from one special event contract, defendants have not provided any other contracts, correspondence, invoices, bills, menus or other communications with their customers regarding Administrative Fees charged for any other special event. Hence, while defendants have shown that one certain, specified special event's contract did contain a statement that the charged Administrative Fee was not a gratuity, they have failed to meet the remaining requirements set forth in 12 NYCRR § 146-2.19 (c). Defendants have not demonstrated that any or all other "menus and bill[s] listing prices" included similar language stating that the Administrative Fee was not a gratuity. In addition, defendants have not established that the language in the contracts that they have provided was in a 12-point font, as is also strictly required by the regulation (Button v Metro. Club, Inc., 187 AD3d 630 [1st Dept 2020]).

Further, while defendants did submit a sample or representative contract, the Court has no knowledge of whether there were other contracts, for other events, worked by plaintiffs that [*3]may not have this language included. Thus, at this time defendants have failed to rebut the presumption that the Administrative Fees were gratuities under 12 NYCRR § 146-2.18 (b), as alleged by plaintiffs. Accordingly, the branch of defendants' motion seeking to dismiss plaintiffs' claims based upon documentary evidence is denied.^[FN1]

Defendants also seek dismissal of plaintiffs' claims against defendant GG Campbell LLC d/b/a The Campbell ("GG Campbell"). Defendants argue that none of the plaintiffs were employed by GG Campbell, and further argue that plaintiff Heslop's claims must be dismissed because she was never employed by any defendants. Specifically, although plaintiffs allege that Heslop did work for GG Campbell, at the events in question (Amended Complaint, ¶ 10), defendants argue that Heslop was in fact the employee of a third-party staffing agency. Plaintiffs do not dispute that Heslop was not hired directly by defendants. Rather, they argue that while she was assigned to perform work for defendants through a third-party agency, she is considered an employee of defendants for liability under the Labor Law, as an indirect employer.

In Colon v Compass Group USA, Inc., the Appellate Division, Second Department set forth the pertinent law with respect to determining whether a person is considered an employee for purposes of Labor Law § 196-d.

'The determination of whether an employer-employee relationship exists turns on whether the alleged employer exercises control over the results produced, or the means used to achieve the results. Control over the means is the most important consideration' " (Athenas v Simon Prop. Group, LP, 185 AD3d 884, 885 [2020], quoting Abouzeid v Grgas, 295 AD2d 376, 377 [2002]). "Factors relevant to assessing control include whether the worker (1) worked at his [or her] own convenience, (2) was free to engage in other employment, (3) received fringe benefits, (4) was on the employer's payroll and (5) was on a fixed schedule" (Bynog v Cipriani Group, 1 NY3d 193, 198 [2003]; see Davis v EAB-TAB Enters., 166 AD3d 1449, 1450 [2018]; Gagen v Kipany Prods., Ltd., 27 AD3d 1042, 1043 [2006]). " '[I]ncidental control over the results produced without further indicia of control over the means employed to achieve the results will not constitute substantial evidence of an employer-employee relationship' " (Weinfeld v HR Photography, Inc., 149 AD3d 1014, 1015 [2017], quoting Raja v Big Geyser, Inc., 144 AD3d 1123, 1124 [2016] [internal quotation marks omitted]).

Colon v Compass Group USA, Inc. 188 AD3d 800, 801-02 [2d Dept 2020].

Accordingly, given that this type of determination is very fact intensive and requires an in-depth examination of the circumstances relating to defendants' control of plaintiff Heslop's work, it would be improper to resolve these issues based merely on the pleadings, on a pre-answer motion to dismiss. Accordingly, the branch of defendants' motion seeking to dismiss plaintiff Heslop's claims against defendant GG Campbell is denied, without prejudice once the [*4]facts are developed.^[FN2]

Defendants also seek dismissal of plaintiffs' second and third causes of action. Plaintiffs' second and third causes of action assert independent claims for defendants' alleged violation of 12 NYCRR § 146-2.18 and 2.19, respectively. Defendants argue that neither of these regulations creates a private cause of action, separate and independent from a Labor Law § 196-d claim. Plaintiffs claim that the Appellate Division, Second Department, in Membrives v. HHC TRS FP Portfolio, LLC, held that a separate cause of action does exist under those regulations (196 AD3d 560 [2d Dept 2021]).

While the parties disagree as to whether these regulations create a separate cause of action, the parties are in agreement that even if the second and third causes of action were to apply, and if defendants were found liable under those causes of action, the measure of damages would be identical as the measure of damages if plaintiff were found to be liable solely under the Labor Law. In addition, the parties are in agreement that under a claim made pursuant to Labor Law § 196-d, defendants would only be liable to employees, but not to those who were not legally deemed their employees. (NYSCEF Doc No. 42.)

As this Court has already stated above that at this pre-answer juncture no determination can be made as to the various plaintiffs' and defendants' employer-employee status, and as the measure of damages would not change under the separate cause of action, there may end up being no justiciable controversy with respect to the second and third causes of action, and no practical difference with respect to damages, if plaintiffs are indeed deemed employees. Accordingly, the branch of defendants' motion seeking to dismiss the second and third causes of action is denied, without prejudice to renew.

Defendants further argue that the claims against defendants Gerber Group LP and After Midnight LLC must be dismissed because the Amended Complaint does not allege specific facts to support a legal conclusion that those two defendants, together with defendants GG LES and GG Campbell, operate as a single or joint employer. The single employer doctrine imposes liability where two nominally separate entities are part of a single integrated enterprise. Four criteria are used in determining whether two or more companies are sufficiently interrelated to constitute a single entity under that doctrine: (i) interrelation of operations; (ii) centralized control of labor relations; (iii) common management; and (iv) common ownership or financial control of the entities in question (Lockwood v CBS Corporation, 219 AD3d 1326 [2d Dept 2023]).

Defendants contend that plaintiffs have not adequately pled that Gerber Group LP or After Midnight LLC were a single employer with GG LES, LLC or GG Campbell, LLC. However, plaintiffs have in fact made several specific allegations in support of that claim. Specifically, plaintiffs have alleged that:

Defendants . . . . share a common business purpose and ownership, and maintain common control, oversight and direction over the operations of the work performed by Plaintiffs and putative class members, including payroll practices. Indeed, in filings with the State of New York, Defendant GERBER GROUP LIMITED PARTNERSHIP is [*5]identified as the 100% member of Defendant AFTER MIDNIGHT COMPANY, LLC, who itself is identified as a member of the other corporate defendants. Moreover, Gerber Group maintains a website at gerbarbars.com that lists the venues it manages, and explicitly states:

Hospitality industry leader, Gerber Group, is the owner-operator of 7 innovative cocktail bars and restaurants in New York, Washington D.C., and Atlanta. Each venue celebrates the importance of genuine hospitality and positive customer experiences.

Through this website, customers have the ability to "plan an event" at any Gerber Group venue.

(Amended Complaint, ¶ 18.)

Taking all of the statements in the Amended Complaint as true, plaintiffs have indeed pled facts sufficient to properly allege the single employer doctrine, and this portion of the motion must also be denied.

Finally, defendants also moved to dismiss the claims against defendant GG W38 LLC d/b/a/ Nearly Ninth, relief to which plaintiffs have consented. Accordingly, —it is

1. ORDERED that the part of defendants' motion seeking to dismiss the Amended Complaint based on documentary evidence is DENIED; and it is further

2. ORDERED that the part of defendants' motion seeking to dismiss the claims against defendant GG Campbell LLC d/b/a The Campbell, Gerber Group LP and After Midnight LLC, as well as the claims of plaintiff Heslop, is DENIED without prejudice; and it is further

3. ORDERED that the part of defendants' motion seeking to dismiss the second and third causes of action is DENIED without prejudice to renew; and it is further

4. ORDERED that the part of defendants' motion seeking to dismiss the claims against defendant GG W38 LLC d/b/a/ Nearly Ninth is GRANTED; and it is further

5. ORDERED that the claims by plaintiff Bess are dismissed as acknowledged on the record at the May 14, 2024 oral argument.

This constitutes the Decision and Order of this Court.