Rokuson v. Century Empire Szechuan Restaurant Inc. et al
MEMORANDUM AND ORDER: Defendants' motion for summary judgment is DENIED. Furthermore, the Court finds that King is a necessary party and hereby ORDERS Plaintiff to join King to this action within 30 days. Ordered by Judge William F. Kuntz, II on 4/2/2015. (Brucella, Michelle)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
MEMORANDUM AND ORDER
-againstCENTURY EMPIRE SZECHUAN RESTAURANT INC.
and HELEN (LAST NAME UNKNOWN),
WILLIAM F. KUNTZ II, United States District Judge
Plaintiff Adam Rokuson ("Plaintiff') sues Century Empire Szechuan Restaurant Inc.
("Century") and its manager Yu Zhang, referred to in both parties' papers as "Helen" with no
last name ("Helen") (collectively "Defendants"). Plaintiff alleges that Defendants interfered
with the exercise of Plaintiffs rights under the Family and Medical Leave Act, 29 U.S.C.
§ §2611-2619 ("FMLA"), and retaliated against Plaintiff for exercising such rights. Plaintiff also
makes claims of discrimination under the New York City Administrative Code §8-107 and New
York State Executive Law §296. Defendants move for summary judgment on Plaintiffs federal
law claims and for consequent dismissal of the state and city law claims for lack of subject
matter jurisdiction. Defendants argue that summary judgment is appropriate because (1) Century
and the restaurant's subsequent owners are not employers under FMLA, and (2) Plaintiff has not
made out a prima facie case of interference or retaliation under FMLA. For the reasons more
fully described below, the parties have numerous genuine disputes over issues of material fact.
As such, Defendants' motion for summary judgment is DENIED.
The events recounted below are undisputed or described in the light most favorable to
Plaintiff, the non-moving party. See Capobianco v. City of New York, 422 F.3d 47, 50 n.l (2d
Ownership of Empire
Defendant Century owned a Chinese restaurant located in Staten Island until March 1,
2009, when Century sold the restaurant to East 555 Inc. ("East 555"). Dkt. 20-4 ("Helen's
Deposition") at 36, 38; Dkt. 21 ("Def.'s Reply") at 4. From March 1, 2009 to January 26, 2012,
the restaurant was owned by East 555 and did business as Empire Szechuan Restaurant
("Empire"). Helen's Deposition at 38. Peter Lau ("Lau"), Helen's significant other, is the
President and owner of East 555. Helen's Deposition at 19, 47; Dkt. 19-2 ("Lau Deel.") ~~l-2.
In September 2011, in addition to East 555 (which then owned Empire), Lau held control of
corporations that owned East Sushi (a Japanese restaurant in Staten Island) and Empire Szechuan
Garden ("Garden") (a Chinese restaurant in Staten Island). Lau Deel.
On January 26, 2012, East 555 sold Empire to another corporation, Empire King Inc.
("King"); under King's ownership, Empire continued to do business under the same name.
Helen's Deposition at 37-38; see also Dkt. 19-4 ("Agreement of Sale"); Lau Deel.
Liu ("Liu") is the President and owner of King. Dkt. 19-3 ("Liu Deel.") ~~1-2. Liu was also
employed part-time at Empire starting in February 2012. Helen's Deposition at 68. Helen has
worked at Empire since March 1, 2009 and has been a manager there since 2011. Id. at 36, 39.
Plaintiff brought this action against Century and not against King, Empire's current
owner. See Dkt. 1 ("Complaint"); Liu Deel.
For reasons discussed below, the Court orders
the joinder of King as a Defendant. See IIA below.
Plaintiff's Employment with Empire
Plaintiff began working for Century in 2007 and continued to work there after its 2009
sale to East 555, after which the restaurant began doing business as Empire. Complaint at ~15;
Lau Deel. ~~1-2. Helen was Plaintiff's supervisor and a manager from approximately 2011
onwards. Complaint at ~16; Helen's Deposition at 39. Plaintiff further alleges that Helen
represented to him and to other employees that she owned Empire, East Sushi, Garden, and a
fourth restaurant called East Pacific Asian Kitchen ("Pacific"). Dkt. 20-2 ("Rokuson Deel.") at
Plaintiff alleges that, in addition to his work for Empire, he also worked for East Sushi,
Garden, and Pacific under Helen's direction and management. Id. at ~~11-13, 18-23.
Defendants, for their part, allege that Plaintiff was only ever employed at Empire, that the
operations and finances of the various restaurants were separate and independent of each other,
and that if Plaintiff or any employee occasionally did work for more than one of the restaurants,
the employment relationships that each restaurant had with Plaintiff were separate. Helen's
Deposition at 102-103; Lau Deel. at ~~22-26; see also Liu Deel. at ~~10-13. Liu further states
that, after January 26, 2012, Peter Lau had no involvement in the operations or finances of
Empire, which were separate from those of any other restaurant. Liu Deel. at ~~4, 14.
Empire has approximately 48 employees (Rokuson Deel. if7); East Sushi likewise has
approximately 48 employees (Id. at ~8); Pacific has approximately 40 employees (Id. at ~9); and
Garden has approximately 30 employees (Id. at ~10).
Plaintifrs Medical Leave
On or about January 13, 2012, Plaintiff suffered a sciatica attack, and contacted Helen to
inform her of his condition and his intent to take leave from work. Complaint at ~20. Helen told
him that he should come back when he felt better and that his job would be there for him when
he returned. Id. at ~21. However, when Plaintiff asked to come back to work, Helen gave him a
reduced schedule. Id. at ~32. Plaintiff alleges that this was interference and retaliation in
violation of his rights under FMLA; he claims that Helen was acting out of discriminatory
motives since he is not Chinese and was temporarily disabled. Id. at ~35. Though he makes no
claims of discrimination under federal law, Plaintiff alleges that Defendants permitted Chinese
workers to take leave and return to their full schedules. Id. at ifif26-29.
Defendants claim that Helen only placed Plaintiff on a reduced schedule out of caution
and concern for his health, and that they wanted him to return to work slowly as his health
improved. Dkt. 19-5 ("Helen's Deel.") at ifif50-52. Furthermore, Defendants point out that
Plaintiff was never terminated; they state that Plaintiff is even now welcome to return to work at
Empire at any time. Id. at if 53.
Summary Judgment Standard
A court "shall grant summary judgment ifthe movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.
R. Civ. P. 56(a). "The role of the court is not to resolve disputed issues of fact but to assess
whether there are any factual issues to be tried. In determining whether summary judgment is
appropriate, this Court will construe the facts in the light most favorable to the non-moving party
and must resolve all ambiguities and draw all reasonable inferences against the movant." Brod v.
Omya, Inc., 653 F.3d 156, 164 (2d Cir. 2011) (internal quotation marks and citations omitted).
No genuine issue of material fact exists "where the record taken as a whole could not lead a
rational trier of fact to find for the non-moving party." Lovejoy-Wilson v. NOCO Motor Fuel,
Inc., 263 F .3d 208, 212 (2d Cir. 2001) (internal editing omitted) (citing Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).
If the moving party satisfies this burden, the non-moving party must "make a showing
sufficient to establish the existence of [each] element to that party's case ... since a complete
failure of proof concerning an essential element of the non-moving party's case necessarily
renders all other facts immaterial." Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
Importantly, if the evidence produced by the non-moving party "is merely colorable, or is not
significantly probative, summary judgment may be granted." Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 249-50 (1986) (internal citations omitted).
Here, Defendants move for summary judgment on the bases that (1) Empire is not an
employer under FMLA, and (2) that Plaintiff has failed to make aprimafacie case for
interference with and retaliation for the exercise of his rights under FMLA. SJ Motion at 9-16;
Def s Reply at 7-9. Plaintiff responds that (1) Empire is either a single integrated employer or a
joint employer with East Sushi, Pacific, and Garden, (2) that King is a successor in interest to
East 555, and (3) that Plaintiff has established a prima facie case for both interference and
retaliation under FMLA. Dkt. 20-1 ("Pl. 's Reply") at ii. For the reasons set forth below,
Defendants' motion is DENIED.
A. Joinder of King as a Defendant
As an initial matter, the Court hereby orders the joinder of King as a defendant. The
Court must, "if feasible," add as a party any "person who is subject to service of process and
whose joinder will not deprive the court of subject-matter jurisdiction" if "in that person's
absence, the court cannot accord complete relief among existing parties." Fed. R. Civ. P.
19(a)(l)(A); see also 19(a)(2). Courts generally consider joinder infeasible where "(l) where
joinder would deprive the court of subject matter jurisdiction; (2) where the court cannot exercise
personal jurisdiction over the absent person; and (3) where joinder would cause venue to be
improper." Mazzocchi v. Windsor Owners Corp., 1 l-CV-7913, 2014 WL 594085, at *4
(S.D.N.Y. Feb. 11, 2014) (Torres, J.) (citing 4 Moore's Fed. Practice§ 19.02(3)(b) (3d ed.
Here, subject matter jurisdiction arises out of Plaintiffs federal law claims against
Defendants; such jurisdiction will be undisturbed by the addition of King as a Defendant.
Furthermore, as King owns a restaurant operating in the Eastern District of New York, the Court
can exercise personal jurisdiction over King and joinder will not cause venue to be improper.
See Fed. R. Civ. Pro. 4(k); 28 U.S.C. § 1391(b), (c).
In King's absence as a named defendant, the Court will be unable to accord complete
relief among the parties. Defendants allege that Century no longer exists, and provide supporting
evidence from the New York State Department of State's Division of Corporations. Dkt. 18-2.
King owns the business operation concerned in this dispute. Liu Deel.
The events Plaintiff
complains of occurred after King's purchase of Empire (see discussion below). The motion for
summary judgment presently before the Court describes King's size and operations in detail,
because such facts are vital to the question of whether Plaintiff may obtain relief under FMLA.
Dkt. 19 ("SJ Motion") at 9-10. Liu, the President and owner of King, has already submitted a
declaration in this action, providing crucial information. See Liu Deel. Furthermore, failure to
require King's joinder creates the possibility of a duplicative action against King in another
forum. See, e.g., Pan-Am. World Airways, Inc. v. Vetements, Inc., 08-CV-5480, 2010 WL
3632732, at *3 (S.D.N.Y. Sept. 16, 2010) (Holwell, J.) (requiringjoinder where the joined
parties were "too closely intertwined" with plaintiffs claims and where there was potential for
duplicative actions if they were not joined); see also New York v. Gutierrez, 08-CV-2503, 2008
WL 5000493, at *14 (E.D.N.Y. Nov. 20, 2008) (Sifton, J.) (requiringjoinder of interstate
commission as defendant where, because commission regulated some of the territory concerned
in the dispute, the court could not provide full relief in the commission's absence). King is
therefore a necessary party to this action. The Court hereby ORDERS Plaintiff to join King as a
defendant within 30 days.
B. Parties Dispute Material Facts Regarding Defendant Empire's Status as an
Employer under FMLA
Here, summary judgment on the subject of Empire's status as an employer under
FMLA would be premature because the parties dispute material facts regarding whether or not
Empire is an employer under FMLA. The Court will discuss these disputed facts in tum.
1. There is a Genuine Dispute Over Facts Material to Whether Empire is Integrated
with Other Restaurants.
An "employer" under FMLA is "any person engaged in commerce or in any industry or
activity affecting commerce who employs 50 or more employees for each working day during
each of 20 or more calendar workweeks in the current or preceding calendar year." 29 U.S.C. §
2611(4)(A)(i). The term "employer" includes (1) "any person who acts, directly or indirectly, in
the interests of an employer to any of the employees of such employer"; and (2) "any successor
in interest of an employer." 29 U.S.C. § 2611(4)(A)(ii). An "eligible employee" under FMLA
does not include an employee who ( 1) is employed at a worksite where his employer employs
less than 50 employees; and (2) whose employer employs less than 50 employees within 75
miles of that worksite. 29 U.S.C. § 2611(2)(B)(ii).
Separate employers may be considered a single "integrated" employer under FMLA
based on an evaluation of the following factors: (1) "[c]ommon management"; (2)
"[i]nterrelation between operations"; (3) "[ c]entralized control of labor relations"; and (4)
"[d]egree of common ownership[ or ]financial control." 29 C.F.R. § 825.104(c)(2). No one
factor determines whether two employers are considered an integrated employer; this
determination must be made based on the "totality" of the "entire relationship" between the two
employers. Id. If separate employers are deemed to be one integrated employer, "the employees
of all entities making up the integrated employer will be counted in determining employer
coverage and employee eligibility." Id.; see, e.g., Ghaffar v. Willoughby 99 Cent, Inc., 09-CV509, 2010 WL 3420642, at *2-3 (E.D.N.Y. Aug. 27, 2010) (Gleeson, J.) (applying the factors
listed above and concluding that defendant was integrated with other businesses).
Here, genuine disputes of material fact exist regarding whether Empire and East Sushi (or
Garden, or Pacific, or some combination of the four) are, together, an integrated employer. Plaintiff
claims that, under the ownership of both East 555 and King, Empire's relationship with East Sushi
and the other restaurants allegedly owned or managed in common with Empire meets the "integrated
employer" test under 29 C.F.R. § 825.104(c)(2). Pl's Reply at 9-10. In support of this claim,
Plaintiff cites his own testimony that Helen supervised drivers for all four restaurants, that East Sushi
and Empire would coordinate orders with deliveries using a bell system, that Empire drivers would
generally handle deliveries for East Sushi, and that Helen represented to employees that she owned
all four restaurants. Rokuson Deel. ~~5-6, 19, 23-24. These allegations, if true, suggest some degree
of common management, interrelated operations, centralized control of labor relations, and possibly
common ownership (whether by Helen or by her significant other Lau). See 29 C.F.R. §
Defendants state that the management, operations, and finances of all of the restaurants are
separate. Lau Deel.
11-20, 23-26; Liu Deel.
Nevertheless, Defendants acknowledge
that Lau controlled East 555 until 2012 and still controls the corporations that own East Sushi and
Garden. Lau Deel. ~~2, 5. East 555 has sold Empire to King; however, Empire's business
operations remained the same after the sale. Liu Deel. at ~6. Defendants also acknowledge that
Plaintiff and other Empire drivers would make deliveries for East Sushi, though they state that these
drivers were still only employees of Empire and not of East Sushi. Helen's Deposition at 102. None
of these facts prove that Empire is a single integrated employer. However, without more
substantiation of the separateness of the restaurants from Defendants, these facts suggest that it is
unclear whether Empire, East Sushi, and any of the other restaurants are an integrated employer.
See, e.g., Ghaffar, 2010 WL 3420642 at *3 (finding that businesses were integrated where all were
owned by corporations controlled by one person, there was common management, and labor
relations were centralized).
2. There is a Genuine Dispute Over Facts Material to Whether Empire is a Joint
Employer with Other Restaurants.
Genuine issues of material fact also exist as to whether Empire is a joint employer with
another restaurant. Separate employers may be considered joint employers under FMLA if they both
"exercise some control over the work or working conditions of the employee." 29 C.F.R. §
825.106(a). As with determinations of integrated employer status, the joint employer determination
does not depend on any single criterion, but rather on the "totality" of the "entire relationship"
between the purported joint employers. 29 C.F .R. § 825 .106(b). In examining the totality of the
entire relationship, the first question for courts is whether the employee's work "simultaneously
benefits two or more employers." 29 C.F.R. § 825.106(a). Next, courts may ask ifthe employee
works for the different employers on different days of the workweek. Id. If the answer to either
question is in the affirmative, then a joint employment relationship "will generally be considered to
exist" ( 1) where the employers have an arrangement to "interchange employees" or "share an
employee's services"; (2) where "one employer acts directly or indirectly in the interests of the other
employer in relation to the employee"; or (3) where the employers "are not completely dissociated
with respect to" the employee, and may be deemed to share common control of the employee,
because one employer controls the other, or because both employers are under the same common
control. Id.; see, e.g., Voltaire v. Home Servs. Sys., Inc., et al., 823 F. Supp. 2d 77, 96-98 (E.D.N.Y.
2011) (Townes, J.) (applying the factors above to conclude that there was a genuine dispute over
whether defendants were joint employers). "Employees employed jointly by two employers must be
counted by both employers" for FMLA purposes. 29 C.F.R. § 825.106(d).
Here, if Empire is a joint employer, then its employees would be counted together with
the other restaurant's (or other restaurants') and they would both qualify as employers under
FMLA. See 29 C.F.R. § 825.106(d); Rokuson Deel. 117-10. For the reasons set forth
immediately above, it is unclear whether the restaurants shared common control over Plaintiff, or
whether there was any arrangement to interchange employees. See 29 C.F.R. § 825.106(a);
Rokuson Deel. 1119-20, 23; Helen's Deposition at 68. It is clear that for a time the restaurants
were under common control. Lau Deel. 112, 5. As such, there is a genuine dispute over material
facts regarding Empire's possible status as a joint employer.
3. There is a Genuine Dispute Over Facts Material to Whether King is a Successor in
Interest to East 555.
If Empire was not, in 2012, a single integrated employer or a joint employer with East
Sushi, Garden, or Pacific because it was under new ownership, it might still be liable under
FMLA as a successor in interest to an employer.
Under FMLA, the term "employer" includes a "successor in interest of an employer." 29
U.S.C. § 2611(4)(A)(ii)(II). "When an employer is a successor in interest, employees'
entitlements are the same as if the employment by the predecessor and successor were
continuous employment by a single employer." 29 C.F.R. § 825.107(c). As with the
determinations regarding integrated or joint employers, the determination of successor in interest
status docs not depend on any single criterion, but rather is based on the ''totality" of the "entire
circumstances.'' 29 C.F.R. § 825.107(b). Factors to be considered include: ''(1) [s]ubstantial
continuity of the same business operations; (2) [u]se of the same plant; (3) [c]ontinuity of the
workforce; (4) [s]imilarity of jobs and working conditions; (5) [s]imilarity of supervisory
personnel; (6) [s]imilarity in machinery, equipment, and production methods; (7) [s]imilarity of
products or services; and (8) [t]he ability of the predecessor to provide relief." 29 C.F.R. §
825.107(a); see, e.g., Slaughter v. Am. Bldg. Maint. Co. ofN. Y, 64 F. Supp. 2d 319, 327 n.8
(S.D.N.Y. 1999) (Sweet, J.) (finding that corporation was successor in interest because the
supervisory and custodial staff, the supervisory and custodial responsibilities, and the working
conditions all remained substantially similar after transition from predecessor to successor).
Here, if Empire under the ownership of East 555 (controlled by Peter Lau, see Lau Deel.
was an employer, then Empire under the ownership of King could be a successor in interest.
According to Defendants' own papers, several factors involved in deciding a business is a
successor in interest exist here. For example, after its sale to King in 2012, Empire continued the
same business operations, used the same building, retained the same work force, and kept Helen
on as manager. Liu Deel.
5-7. As such, there is a genuine dispute over facts material to the
determination of whether King is a successor in interest to East 555. See, e.g., Slaughter, 64 F.
Supp. 2d at 327 n.8 (business is successor in interest where supervisory and custodial staff and
responsibilities and working conditions remain the same); Vanderhoof v. Life Extension Inst.,
988 F. Supp. 507, 513-14 (D.N.J. 1997) (Politan, J.) (applying all eight factors to find that
acquiring business was successor in interest).
Therefore, Defendants' motion for summary judgment on the grounds that Empire is not
an employer under FMLA is DENIED.
C. Parties Dispute Material Facts Regarding Whether Plaintiff Has Established a
Prima Facie Case of Interference or Retaliation
Genuine issues of material fact also exist as to whether Plaintiff has established a prima
facie case of interference or retaliation under FMLA. Courts within the Second Circuit have
commonly used a particular test for prima facie cases of interference with the exercise of FMLA
rights (see 29 U.S.C. § 2615(a)(l)); however, the Second Circuit has not yet established this test
as the rule in FMLA interference cases, despite its common use. See, e.g., Achille v. Chestnut
Ridge Transp., Inc., 584 F. App'x 20, 21 (2d Cir. 2014). Under the common test, a plaintiff
must show that ( 1) he is an eligible employee under FMLA, (2) the defendant is an employer as
defined under FMLA, (3) the plaintiff was entitled to take leave, (4) the plaintiff gave notice to
the defendant of his intent to take leave, and (5) the plaintiff was denied benefits to which he was
entitled under FMLA. See, e.g., Higgins v. NYP Holdings, Inc., 836 F. Supp. 2d 182, 193
(S.D.N.Y. 2011) (Engelmayer, J.). The Court will apply this primafacie standard for
interference in this case.
A prima facie case of retaliation for the exercise of rights under FMLA requires the
plaintiff to show that: "1) he exercised rights protected under FMLA; 2) he was qualified for his
position; 3) he suffered an adverse employment action; and 4) the adverse employment action
occurred under circumstances giving rise to an inference ofretaliatory intent." Potenza v. City of
New York, 365 F.3d 165, 168 (2d Cir. 2004); see also Voltaire, 823 F.Supp.2d at 92. This prima
facie retaliation standard is the first step of the three-part burden-shifting scheme established in
McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-805 (1973). See, e.g., Potenza, 365 F.3d
at 168. The plaintiffs burden of proof in this first step "has been characterized as 'minimal' or
'de minimis. "'Desir v. City of New York, 453 F. App'x 30, 35 (2d Cir. 2011) (quoting Jute v.
Hamilton Sundstrand Corp., 420 F.3d 166, 173 (2d. Cir. 2005) (internal citations omitted)).
Here, the disputed element of the prima facie case for interference is whether Plaintiff
was denied benefits. Plaintiff claims that his reduced hours on his return to work was a denial of
benefits; Defendants claim that it was simply a temporary measure taken out of caution and
concern. Rokuson Deel.
The disputed element of the prima
facie case for retaliation is whether Plaintiff experienced any adverse action at all, let alone under
circumstances allowing for an inference of retaliation. Plaintiff claims that he was retaliated
against for taking leave and could no longer being unable to work for any of the four restaurants
he named; Defendants claim that not only were Plaintiffs reduced hours merely a temporary
health accommodation, but that he was never terminated and that he remains welcome to return
to work. Complaint at ~35; Rokuson Deel.
53; Defs Reply at 9.
All Defendants have shown is that there are conflicting accounts of whether Plaintiff was
denied benefits or suffered an adverse action. Viewing the facts in the light most favorable to
Plaintiff, this showing is insufficient to support a grant of summary judgment for Defendants.
With respect to Plaintiffs prima facie case for interference under FMLA, Defendants are not
entitled to summary judgment since they cannot provide documentary corroboration of their
account. The Court is left to weigh Defendants' account against Plaintiffs, which is
inappropriate for summary judgment. See, e.g., Benimovich v. Fieldston Operating LLC, 11-CV780, 2013 WL 1189480 at *4 (S.D.N.Y. Mar. 22, 2013) (Abrams, J.) (denying summary
judgment on prima facie FMLA interference claim where defendants, the moving parties, could
only provide their word against plaintiffs regarding the time of the decision to terminate
plaintiff) (citing Voltaire, 823 F.Supp.2d at 94). Similarly, Defendants cannot prevail on
summary judgment as to Plaintiff's primafacie retaliation claims. For the Court to grant
summary judgment, "there must be no questions about the material facts of the prima facie
case." Rajcoomar v. TJX Cos., Inc., 319 F. Supp. 2d 430, 434 (S.D.N.Y. 2004) (Robinson, J.).
A mere showing of conflicting accounts is insufficient. Lyman v. NY and Presbyterian Hosp.,
11-CV-3889, 2014 WL 3417394, at *8, *21 (S.D.N.Y. July 14, 2014) (Polk Failla, J.) (denying
summary judgment where defendant merely provided conflicting account of material element of
plaintiff's primafacie case). This is especially true with respect to primafacie cases of
retaliation because the plaintiff's burden of proof there is minimal. See, e.g., Desir, 435 F.
App'x at 35. Defendants have not carried their burden for summary judgment, and the Court
hereby DENIES their motion.
For the foregoing reasons, Defendants' motion for summary judgment is DENIED. Furthermore,
the Court finds that King is a necessary party and hereby ORDERS Plaintiff to join King to this
action within 30 days.
Dated: April-<.., 2015
Brooklyn, New York
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