By LIZ BUTTON
The company may have been fake, but the employees weren’t. Nine waiters, kitchen workers and bartenders hired by RM Staffing, one of the alleged shell companies set up by former Rye Golf Club manager Scott Yandrasevich, have filed a lawsuit seeking unpaid overtime and stolen tips. The lawsuit was filed against the city, the golf club, RM Staffing, Yandrasevich and the Morris Yacht and Beach Club in the Bronx, where RM also supplied hourly employees.
The workers’ attorneys, unpaid overtime litigation firm Pelton & Associates based in Manhattan, said they expect restitution for their clients—pursuant to the Fair Labor Standards Act and the New York Labor Law—could be “in the millions” of dollars and they are recruiting other former and current RM Staffing employees to qualify the lawsuit as a class action, where a group of people sues another group of people or a person.
Yandrasevich allegedly stole hundreds of thousands of dollars of Rye Golf Club membership dues by submitting falsified invoices to the city manager through shell companies like RM, according to allegations revealed in February 2013 by an independent investigation commissioned by the city.
After the Westchester District Attorney’s office charged Yandrasevich with second-degree grand larceny in November 2013, Rvin Reyes, Israel Cortes Cruz and seven other employees filed a complaint on Dec. 23, 2013, in hopes of recovering unpaid overtime wages for all hours worked in excess of 40 per week, as well as restitution for alleged unlawful misappropriation of gratuities and for certain unreimbursed business expenses, such as uniform cleaning.
The plaintiffs are looking for more bartenders, bussers, kitchen staff, dishwashers and other hourly employees to join the suit if they were employed at the golf club’s Whitby Castle restaurant or Morris Yacht club since Dec. 20, 2010.
While the nine named plaintiffs also filed suit against Morris Yacht, the vast majority hired by RM worked in Rye.
RM Staffing remains an active company in New York, according to the lawsuit, which alleges that even after Yandrasevich’s tenure as manager at Whitby ended in January 2013 or before, “the current employees being employed by [the city] were only being paid straight time for overtime hours worked.”
The employees’ attorneys, Br-ent Pelton and Alison Lobban, said they expect there will be more than the 40 plaintiffs necessary for a class action suit, and that many more current and former employees will join once the judge certifies the suit as a class action.
One club member who has spoken with some of the employees has suggested that some of these workers are undocumented and at risk of being deported, a factor that could explain why a class action suit is being filed since including one’s name in such a suit is not necessary for participation. This would remove any risk that a particular employee would be targeted by the U.S. Immigration Department by drawing attention to themselves in their attempt to claim restitution.
Pelton said the employees came to Pelton & Associates in December because “they knew that what happened to them was unfair.”
Under New York Labor Law 196d, Pelton said, it is clear that gratuities belong to the service employees, and Yandrasevich, as manager, admitted at an Oct. 9, 2012 Rye Golf Club Commission meeting that all employees’ tips went to the restaurant to “offset labor costs.”
Payroll records and other information revealed by the city’s independent investigation will also be used as evidence in the case, Pelton said.
Pelton called this case “an extreme example” of employer theft, but also said it is something that the firm sees from time to time, especially in the context of banquet halls and catering facilities like Whitby, where tips have been stolen when they are lumped in with what are listed as “service charges” on a credit card bill, or employees are paid no overtime wages.
Yandrasevich, who started working at the city-owned club in 2002 until his resignation last January, stole from the club for at least four years running, according to the felony charges filed by the district attorney.
“I think [the employees] have an excellent case,” said Lobban. “The city didn’t pay them their tips, the city isn’t paying them what they’re owed, and they’re entitled to all compensation earned according to New York Labor Laws and Fair Labor standards.”
Rye forwarded the lawsuit to its insurance carrier, according to City Attorney Kristen Wilson, who emphasized that none of these plaintiffs are City of Rye employees because they were hired directly by RM Staffing to work at the city-run club.
Wilson said if the employees are successful in forming a class action suit, how the city handles it will depend on its insurance coverage. As of press time, the city has not yet gotten its coverage determination from their carrier, but Wilson said she expects that to happen in the next few days.
“If we don’t have coverage, we will have to put together a budget of what we would want to defend this matter,” Wilson said and, on this, she would consult the City Council.
While it’s possible that the city may choose to argue the plaintiffs were not city employees and, therefore, the city is not liable, Pelton said, the definition of employer under New York Labor Law is much larger than in some states’ codes.
“The employees were managed by the City of Rye, so we’re confident that the city was their employer,” he said.
The suit states that a class action is superior to other available methods for this particular litigation because of the financial status of those workers affected. In this case, the “individual plaintiffs lack the financial resources to vigorously prosecute a lawsuit in federal court against corporate defendants.”
Mayor Joe Sack, a Republican, said he has not yet looked into the details of the lawsuit, but plans to discuss it with Wilson soon. He did not offer any further comment.