Leal v. Masonry Services, Inc. et al

Filing 54

ORDER denying 11 Motion to Dismiss for Failure to State a Claim -- For the reasons set forth in the ATTACHED WRITTEN MEMORANDUM AND ORDER, the motion to dismiss filed by defendants Jaime T. Herrera, Salomon Herrera, and James Herrera is denied. This case shall proceed under the pretrial supervision of the Hon. Viktor V. Pohorelsky, U.S.M.J. SO ORDERED by Judge Dora Lizette Irizarry on 2/12/2013. (Irizarry, Dora)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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HECTOR LEAL, individually and on behalf of :
all other persons similarly situated who were
:
employed by MASONRY SERVICES, INC., :
HERRERA RESTORATION, INC., MJM
:
CONSTRUCTION SERVICES, LLC,
:
VALLEY STREAM CONSTRUCTION
:
CORP., HEMPSTED CONSTRUCTION,
:
CORP., DEL MA RESTORATION CORP.,
:
JAIME T. HERRERA, SAUL HERRERA,
:
SALOMON HERRERA, MANUEL
:
HERRERA, and JAMES HERRERA,
:
:
Plaintiffs,
:
:
-against:
:
MASONRY SERVICES, INC., HERRERA
:
RESTORATION, INC., MJM
:
CONSTRUCTION SERVICES, LLC,
:
VALLEY STREAM CONSTRUCTION
:
CORP., HEMPSTED CONSTRUCTION,
:
CORP., DEL MA RESTORATION CORP.,
:
JAIME T. HERRERA, SAUL HERRERA,
:
SALOMON HERRERA, MANUEL
:
HERRERA, and JAMES HERRERA,
:
:
Defendants.
:
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MEMORANDUM AND ORDER
12-CV-588 (DLI)(VVP)

DORA L. IRIZARRY, U.S. District Judge:
Hector Leal (“Plaintiff”), on behalf of himself and others similarly situated, commenced
this action against six corporate entities (the “Corporate Defendants”) and five individuals (the
“Individual Defendants,” and collectively with the Corporate Defendants, “Defendants”) to
recover unpaid overtime and spread of hours compensation pursuant to the Fair Labor Standards
Act, 29 U.S.C. §§ 206, 207, and 216(b) (the “FLSA”), New York Labor Law, Art. 6 § 190 et
seq., and Art. 19 § 650 et seq. (“NYLL”), and New York Compilation of Codes, Rules and

Regulations, tit. 12, §§ 142-2.1, 142-2.2, and 142-2.4. (Compl. ¶ 1, Docket Entry No. 1.) Three
of the Individual Defendants, Jaime T. Herrera, Salomon Herrera, and James Herrera (the
“Moving Defendants”), filed the instant motion seeking dismissal of the claims asserted against
them for failure to state a claim upon which relief may be granted pursuant to Federal Rule of
Civil Procedure 12(b)(6). Plaintiff opposes the motion. For the reasons set forth below, the
Moving Defendants’ motion is denied.
BACKGROUND
The following facts are taken from Plaintiff’s complaint and are accepted as true for the
purposes of this motion. Plaintiff performed masonry and other related construction work for
Defendants from approximately 2005 until March 2011. (Compl. ¶ 10.) Plaintiff, who claims he
was employed jointly by Defendants at all relevant times, typically worked six days per week,
averaging 60 to 70 hours per week. (Compl. ¶¶ 10, 23.) In a typical shift, Plaintiff worked from
approximately 7:30 a.m. to 6 p.m. or 7 p.m., with time for a 30-minute lunch break. (Compl. ¶
10.) Plaintiff did not receive overtime or spread of hours wages during his employment; rather,
he was paid the same rate—between $70 to $110 per day—regardless of the number of hours he
worked. (Id.) Plaintiff also alleges that other similarly situated employees, which Plaintiff
believes consists of more than 100 individuals residing in the State of New York, also were not
paid overtime wages or spread of hours compensation. (Compl. ¶¶ 9, 29, 36-38.)
Each of the Corporate Defendants, six in total, are incorporated under New York law
and/or do business in New York. (Compl. ¶¶ 11-16.) The Corporate Defendants have common
ownership, and maintained common control, oversight, and direction over the construction work
performed by Plaintiff and other similarly situated employees. (Compl. ¶ 24.) Four of the
Corporate Defendants—Masonry Services, Inc., Herrera Restoration, Inc., MJM Construction

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Services, LLC, and Valley Stream Construction Corp.—have principal business locations within
this district. (Compl. ¶¶ 11-14.) Plaintiff alleges that the remaining two Corporate Defendants,
Del Ma Restoration Corp. and Hempstead Construction Corp., are shell corporations that issued
checks to Plaintiff and other similarly situated employees for the work they performed on behalf
of the four other Corporate Defendants. (Compl. ¶¶ 15-17.)
The Moving Defendants are owners, principal shareholders, and directors of some or all
of the Corporate Defendants and, in that capacity, made major personnel decisions and
dominated day-to-day operations. (Compl. ¶¶ 39, 45, 51.) Specifically, Plaintiff alleges the
Moving Defendants had the power to hire and fire employees, supervised and controlled
employee work schedules and conditions of employment, determined the rate and method of
payment for employees, and generated and maintained employment records. (Compl. ¶¶ 40, 46,
52.) Plaintiff and other similarly situated employees worked under the direction of the Moving
Defendants at the relevant times to this action. (Compl. ¶¶ 39, 45, 51.)
Plaintiff initiated this action on February 7, 2012. On March 9, 2012, the Moving
Defendants filed a motion to dismiss the claims asserted against them for failure to state a claim
upon which relief can be granted. 1 The sole basis for dismissal advanced by the Moving
Defendants is that Plaintiff has not adequately alleged that the Moving Defendants constitute
“employers” under the FLSA and NYLL. (See generally Mem. of Law in Supp. of Mot. to
Dismiss (“Defs.’ Mem.”), Docket Entry No. 12; Reply to Pl.’s Opp’n to Mot. to Dismiss (“Defs.’
Reply Mem.”), Docket Entry No. 16.)

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The Moving Defendants have not requested dismissal of the claims asserted by Plaintiff against
the Corporate Defendants or suggested that the factual allegations supporting those claims are
insufficient.
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DISCUSSION
I.

Legal Standard
Rule 12(b)(6) states that a defendant may move, in lieu of an answer, for dismissal of a

complaint for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P.
12(b)(6). To determine whether dismissal pursuant to Rule 12(b)(6) is appropriate, “a court must
accept as true all [factual] allegations contained in a complaint” but need not accept “legal
conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). For this reason, “[t]hreadbare recitals
of the elements of a cause of action, supported by mere conclusory statements, do not suffice” to
insulate a claim against dismissal. Id. Moreover, “[t]o survive a motion to dismiss, a complaint
must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.’” Id. (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007)). “[W]here the
well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct,
the complaint . . . has not shown that the pleader is entitled to relief.” Id. at 679 (internal
citations and quotation marks omitted).
II.

Employer-Employee Relationship
The FLSA defines “employer” to include “any person acting directly or indirectly in the

interest of an employer in relation to an employee.” 29 U.S.C. § 203(d). 2 “In identifying the
persons or entities who qualify as ‘employers’ [under the FLSA], statutory definitions sweep
broadly.” Barfield v. N.Y. City Health & Hosps. Corp., 537 F.3d 132, 140 (2d Cir. 2008).

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The Court’s analysis as to whether the Moving Defendants qualify as “employers” under the
FLSA also applies to Plaintiff’s NYLL claims. See Wolman v. Catholic Health Sys. of Long
Island, Inc., 853 F. Supp. 2d 290, 296 n.4 (E.D.N.Y. 2012) (“The standards by which a court
determines whether an entity is an ‘employer’ under the FLSA also govern that determination
under the New York labor law.”) (quoting Hart v. Rick’s Cabaret Int’l Inc., 2010 WL 5297221,
at *2 (S.D.N.Y. Dec. 20, 2010)).

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Moreover, the FLSA “recognize[s] the possibility of joint employment for purposes of
determining FLSA responsibilities.” Id. at 141.
To determine whether an individual defendant is an employer within the meaning of the
FLSA, “the overarching concern is whether the alleged employer possessed the power to control
the workers in question . . . with an eye to the ‘economic reality’ presented by the facts of each
case.” Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132, 139 (2d Cir. 1999) (citations omitted).
Under the “economic reality” test, the relevant factors include whether the alleged employer: (1)
had the power to hire and fire the employees; (2) supervised and controlled employee work
schedules or conditions of employment; (3) determined the rate and method of payment; and (4)
maintained employment records. Id. However, these factors are not exclusive. Indeed, under
the “economic reality” test, which encompasses the totality of the circumstances, “any relevant
evidence may be examined so as to avoid having the test confined to a narrow legalistic
definition.” Id.
Here, Plaintiff has alleged that the Moving Defendants, in their capacity as owners and
directors of construction businesses operating within this district, had the power to hire and
terminate employees, control work schedules and conditions of employment, and set wages.
Plaintiff’s allegations of operational control, considered together, are sufficient to allege the
Moving Defendants’ status as Plaintiff’s employer, as that term is defined under the FLSA and
NYLL. Several recent decisions interpreting the FLSA and NYLL—each of which involve
factual allegations nearly identical to the ones set forth in Plaintiff’s complaint—lend further
support to the Court’s conclusion. See Wilk v. VIP Health Care Servs., Inc., 2012 WL 560738, at
*8 (E.D.N.Y. Feb. 21, 2012) (denying motion to dismiss where plaintiff alleged that company’s
officer and shareholder had “influence over hiring and firing decisions, and the terms and

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conditions of [plaintiff’s] employment—including how, when, and how much [plaintiff] was to
be paid”); Severin v. Project OHR, Inc., 2011 WL 3902994, at *6 (S.D.N.Y. Sept. 02, 2011)
(denying motion to dismiss where plaintiffs alleged executive director of company “controlled
personnel decisions, and had the power to hire and fire, set wages, and otherwise control the
terms and conditions of the plaintiffs’ employment”); see also Michalek v. Amplify Sports and
Entm’t LLC, 2012 WL 2357414, at *3 (S.D.N.Y. June 20, 2012) (granting leave to amend
complaint to add company’s president as defendant based on allegations that president “had the
authority to hire and fire employees for Amplify, had the authority to supervise employees for
Amplify, controlled employees’ schedules for Amplify, and determined the rate and method of
payment for employees of Amplify”) (internal quotations omitted); Hernandez v. Habana Room,
Inc., 2012 WL 423355, at *3 (S.D.N.Y. Feb. 09, 2012) (“Whether the plaintiff will ultimately be
able to . . . establish that the individual defendants here had sufficient operational control to be
considered ‘employers’ under the FLSA and New York Labor Law is a matter to be determined
on summary judgment or at trial.”). Indeed, the complaint’s allegations appear plausible because
they suggest, when viewed as a whole, a business enterprise of modest size and scope. See Wilk,
2012 WL 560738, at *9 (finding plaintiff’s allegations sufficient where “there [was] no reason to
question the plausibility of [plaintiff’s] allegations in light of VIP’s size or number of employees
[and] there [was] no allegation that VIP is a massive enterprise with far-flung offices and a large
number of employees”).
The Moving Defendants contend that dismissal is warranted because Plaintiff does not
sufficiently allege that the Moving Defendants had direct contact or day-to-day involvement with
Plaintiff. (Defs.’ Mem. at 3, 5; Defs.’ Reply Mem. at 3.) However, Plaintiff’s allegations of
operational control, on their own, are sufficient. See Apple v. Atl. Yards Dev. Co., LLC, 2012

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WL 2309028, at *10 (E.D.N.Y. June 18, 2012) (“While Ratner and Marshall are not alleged to
have played a role in . . . day-to-day administration . . . , they exercised operational control. This
is sufficient to allege their status as joint employers.”); Ahn v. Inkwell Publ’g Solutions, Inc.,
2012 WL 1059679, at *1 (S.D.N.Y. Mar. 29, 2012) (“An owner need not exercise direct control
over an employee to be considered an employer under the FLSA[;] having operational control
over the corporation is sufficient.”); see also Herman, 172 F.3d at 140 (rejecting chairman’s
argument that only evidence indicating his “direct control” over employees should be considered
under the “economic reality” test, because doing so would “ignore[] the relevance of the totality
of the circumstances in determining [the chairman’s] operational control”).
The Moving Defendants principally rely on two recent decisions from courts of
concurrent jurisdiction to suggest that Plaintiff’s allegations are insufficient. (Defs.’ Mem. at 5;
Defs.’ Reply Mem. at 2-3.) Both decisions are distinguishable. In the first, Wolman v. Catholic
Health System of Long Island, Inc., 853 F. Supp. 2d 290 (E.D.N.Y. 2012), the court dismissed
FLSA and NYLL claims asserted against an individual alleged to be a joint employer where the
plaintiffs not only failed to allege direct contact with the individual, but the plaintiffs’ complaint
also was “similarly void of facts that [the individual] had ‘operational control’ over [plaintiffs’
employer].” Id. at 299-300. In contrast, here, Plaintiff’s complaint, which alleges that the
Moving Defendants had control over hiring and firing decisions, compensation, and schedules
and conditions of employment, sufficiently alleges operational control. In the second case relied
on by the Moving Defendants, Nakahata v. New York-Presbyterian Healthcare System, Inc.,
2011 WL 321186 (S.D.N.Y. Jan. 28, 2011), the court dismissed FLSA and NYLL claims
asserted against eighteen entities because the complaints failed to specify which of those entities
employed the respective plaintiffs, and failed to allege specific facts about the plaintiffs’

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employment, including their dates of employment, amount of compensation, and positions held.
Id. at *3-4. These deficiencies are not present here, as Plaintiff has pleaded specific facts
concerning his dates of employment, his pay, and the nature of his work.
CONCLUSION
For the reasons stated above, the Moving Defendants’ motion to dismiss is denied.

SO ORDERED.
Dated: Brooklyn, New York
February 12, 2013
_______________/s/_____________
DORA L. IRIZARRY
United States District Judge

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