Perez v. Min & Kim, Inc. et al

Filing 78

ORDER granting 52 plaintiff's Motion to Amend. Signed by District Judge George Caram Steeh. (MBea)

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
R. ALEXANDER ACOSTA,
Secretary of Labor, United
States Department of Labor,
Plaintiff,
CASE NO. 15-CV-14310
HON. GEORGE CARAM STEEH

v.
MIN & KIM INC., d/b/a
SEOUL GARDEN OF ANN
ARBOR, KOUNWOO HUR,
and SUNG HEE KIM,
Defendants.
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ORDER GRANTING PLAINTIFF’S MOTION TO AMEND (Doc. 52)
Plaintiff, Secretary of Labor R. Alexander Acosta (“Secretary”),
brought this action for alleged violations of the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 201 et seq., against defendant Seoul Garden of Ann
Arbor, a Korean and Japanese restaurant, and its owners Kounwoo Hur
and Sung Hee Kim (collectively “defendants”) for failing to pay their
employees overtime and failing to keep adequate records. Now before the
court is plaintiff’s motion to amend to add eleven employees that
defendants allegedly failed to pay overtime owing. Defendants oppose the

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motion on the grounds that they will be prejudiced as discovery has closed
and the parties’ cross-motions for summary judgment are pending. The
court shall decide the motion without oral argument pursuant to Local Rule
7.1(f)(2). For the reasons set forth below, the Secretary’s motion shall be
granted but limited discovery shall be reopened and both sides may
supplement the pending cross-motions for summary judgment.
Discovery in this matter closed on April 14, 2017. On May 11, 2017,
the Secretary filed his motion to amend to add eleven new employees and
to amend paragraph V of the Complaint to conform with the facts identified
during discovery, namely to use the terms “salary” or “guaranteed wage” to
reflect defendants’ pay practices. The Secretary claims it did not learn that
these additional employees were denied overtime pay until discovery
responses were served on January 31 and April 13, 2017. Defendants
claim that the Secretary knew the identify of these employees long ago,
even before it filed the lawsuit, and that the changes to Paragraph V of the
Complaint changes the Secretary’s theory of recovery at a late stage of the
proceedings.
The Secretary responds that although it knew the identity of the
employees, it did not know of any overtime violations relating to those

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employees until it received pay and time records in January and April,
2017. Further, the Secretary claims the changes in paragraph V of the
Complaint do not amount to a new theory of recovery, but merely reflect
that defendants used the terms “salary” or “guaranteed wage” to describe
their pay practices which the Secretary defined as day rate or half-day rate
basis prior to discovery.
Defendants argue they would be prejudiced because discovery has
closed and dispositive motions were filed on May 15, 2017. They further
argue amendment would be futile because there is no violation of the FLSA
to employ an hourly employee as a salaried employee. Further,
defendants argue that they offered to extend the discovery and dispositive
motion deadlines so that the Secretary could seek leave to file an amended
complaint, but the Secretary refused.
The Secretary responds that there is no prejudice where no new
claims or a different type of relief is asserted, defendants declined to
depose any employees during the discovery period, no further discovery is
necessary as the claims apply to each employee in the same manner, the
claims are not futile as defendants failed to properly compute each
employee’s regular rate and overtime compensation, and defendants never

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offered to extend the discovery deadline only the dispositive motion cut-off
date. The Secretary also argues that if leave to amend is not granted, the
Secretary will file a new Complaint alleging the same violations and
seeking the same relief for these other employees, at considerable
additional expenses to both parties.
The law is well settled that leave to amend shall be freely given.
Federal Rule of Civil Procedure 15(a) provides that once the time period for
amending a pleading once as a matter of right has passed, “a party may
amend its pleading only with the opposing party’s written consent or the
court’s leave. The court should freely give leave when justice so requires.”
Fed. R. Civ. P. 15(a). In Foman v. Davis, 371 U.S. 178, 182 (1962), the
Supreme Court explained that:
In the absence of any apparent or declared reason - such as undue
delay, bad faith or dilatory motive on the part of the movant, repeated
failure to cure deficiencies by amendments previously allowed, undue
prejudice to the opposing parry by virtue of allowance of the
amendment, futility of amendment, etc. the leave sought should, as
the rules require, be ‘freely given.’
Id.
Considering the facts and applicable law, the court deems it
appropriate to grant the Secretary’s motion to amend subject to the
following conditions as set forth below.
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IT IS ORDERED that the Secretary’s motion to amend (Doc. 52) is
GRANTED, discovery shall be reopened for the period ending on
September 29, 2017, and both sides may supplement the pending crossmotions for summary judgment in a brief of no more than ten pages to be
filed on or before October 27, 2017.
IT IS SO ORDERED.
Dated: August 31, 2017
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE

CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
August 31, 2017, by electronic and/or ordinary mail.
s/Marcia Beauchemin
Deputy Clerk

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