Coley et al v. Vannguard Urban Improvement Association, Inc. et al
Filing
298
ORDER granting 269 Motion for Default Judgment: The Court grants Plaintiffs' motion for a default judgment against Defendant Niles and dismisses Defendants' counterclaims against Sonya Coley. The Court previously granted Plaintiffs' ; motion for default judgment against Defendants Vannguard, Local, and the Partnership Corporations. Based, in part, on its prior ruling 220 the Court finds that Plaintiffs are entitled to recover damages under the FLSA and NYLL against Defendants . The Court has consolidated the damages inquest as to Defendants and finds that Plaintiffs are entitled to a total damages amount of $929,973.07, as to which Defendants are jointly and severally liable. Judgment is granted in Plaintiffs favor, and this matter is hereby terminated. Ordered by Judge Pamela K. Chen on 3/27/2018. (Rediker, Ezekiel)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------------------------x
SONYA COLEY, ET AL.,
Plaintiffs,
MEMORANDUM & ORDER
12-CV-5565 (PKC) (RER)
- against VANNGUARD URBAN IMPROVEMENT
ASSOCIATION, INC., ET AL.,
Defendants.
-------------------------------------------------------x
PAMELA K. CHEN, United States District Judge:
In this action alleging violations of the Fair Labor Standards Act (“FLSA”) and the New
York Labor Law (“NYLL”), Plaintiffs Sonya Coley, Ebony Hall, Sonya Johnson, Mossa Jones,
Ruth Richardson, Salika Taylor, Elizabeth Wright, and Thomas Pope now move for default
judgment against Defendant Arthur Niles. This Court has already granted default judgments
against Defendants Vannguard Urban Improvement Association, Inc. (“Vannguard” or “VUIA”);
Vannguard Local Development Corporation, Inc. (“Local” or “VLDC”); and 1686 Gates General
Partners Corp., Malcolm 1677 General Partners Corp., 1659 Hancock General Partners Corp., and
1661 Macon General Partners Corp. (collectively, “the Partnership Corporations”). (Dkt. 220.)
For the reasons set forth below, Plaintiffs’ motion for default judgment is GRANTED as to the
liability of Defendant Niles, and the Court holds that Defendants Niles, Vannguard, Local, and the
Partnership Corporations (collectively, “Defendants”) are liable for $929,973.07.
BACKGROUND
Plaintiffs filed their original complaint on November 9, 2012, naming Vannguard, among
others, as Defendants. (Dkt. 1.) Based on Vannguard’s failure to answer (Dkt. 12), the Clerk of
Court entered default on April 25, 2013. (4/25/13 Dkt. Entry of Default.) On May 3, 2013,
Plaintiffs moved for default judgment against Vannguard. (Dkt. 14.) However, Vannguard, whose
counsel, Andre Soleil, entered an appearance on May 28, 2013 (Dkt. 31), sought to respond to the
complaint, and appeared at a status conference on July 22, 2013, at which the Honorable Ramon
E. Reyes vacated the entry of default (7/22/13 Minute Order). Plaintiffs filed an amended
complaint on September 3, 2013 (Dkt. 58) and a Second Amended Complaint (“SAC”) on October
23, 2013, (Dkt. 68).
Niles and Vannguard both answered the SAC, and asserted similar
counterclaims against Plaintiff Coley, on November 21 and November 22, 2013, respectively.
(Dkts. 70, 71.) On May 5, 2014, with leave of the Court and over Vannguard’s objections (Dkt.
96), Plaintiffs filed the Third Amended Complaint, now the operative complaint in this action, in
which Plaintiffs named Local and the Partnership Corporations as Defendants (Dkt. 100).
Plaintiffs served Local and the Partnership Corporations on October 1, 2015 (see Dkts.
135–39), but those Defendants failed to answer or otherwise move against the Third Amended
Complaint. Plaintiffs sought another entry of default against Local and the Partnership
Corporations. (See 11/23/15 Minute Entry; Dkt. 140.) The Clerk of Court entered default on
December 8, 2015 (Dkt. 144), and Plaintiffs then moved for default judgment as to those
Defendants on December 12, 2015 (Dkt. 145).
On January 29, 2016, Vannguard’s counsel, Soleil, filed a letter advising the Court that
“Vannguard is currently an empty entity with no directors, employees, properties, interests, etc.”,
and that the company would not continue to defend itself in the litigation. (Dkt. 153 at 3.) On
March 16, 2016, Plaintiffs sought entry of default against Vannguard (Dkt. 173), which the Clerk
of Court entered on March 25, 2016 (3/25/16 Dkt. Entry of Default). Plaintiffs moved for default
judgment against Vannguard on April 13, 2016. (Dkt. 178.) On August 5, 2016, the Court granted
default judgment against Vannguard, Local, and the Partnership Corporations, but reserved the
2
damages inquest, pursuant to Fed. R. Civ. P. 55(b)(2), as to these defaulting defendants until the
resolution of the liability portion of the case against Niles, after which the Court would hold a
damages determination as to all Defendants. (Dkt. 220.) On April 10, 2017, the Clerk of Court
entered a default order against Niles.1 (4/10/17 Dkt. Entry of Default.) On April 12, 2017,
Plaintiffs moved for a default judgment against Niles, and moved to dismiss Niles’s counterclaim
against Plaintiff Coley. (Dkt. 269.)
DISCUSSION
I.
Legal Standard for Default Judgment
Under Rule 55(a) of the Federal Rules of Civil Procedure (“Rule 55(a)”), the process for
entry of default against a party who fails to defend is two-fold: “first, the entry of a default, and
second, the entry of a default judgment.” City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d
114, 128 (2d Cir. 2011) (citation omitted). The entry of a default under Rule 55(a) is an admission
of the well-pleaded factual allegations in the complaint except for claims for damages. See Au
Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981). Taking the factual allegations and
all reasonable inferences as true, the court determines whether such alleged facts show liability on
the cause of action claimed. AF Holdings, LLC v. Olivas, 3:12-CV-1401 (JBA), 2014 WL
4782816, at *2 (D. Conn. Sept. 24, 2014). In other words, “after default . . . it remains for the
1
The Court dismissed Thomas Hansard as a defendant on September 24, 2014. (Dkt. 123.)
The Court has also conducted extensive proceedings in connection with Plaintiffs’ motion to seize
and restrain Defendants’ assets, including multiple evidentiary hearings at which, inter alia, Niles
and Soleil testified. (See Dkts. 171, 271; 6/1/2016 Minute Entry; 4/10/2017 Minute Entry). On
May 3, 2016, the Court held a preliminary injunction hearing about whether to restrain the assets
of the Vannguard entities. (See 5/3/2016 Hearing Tr., Dkt. 193.) On December 13, 2016, the Court
ordered the restraint of assets for the Vannguard’s entities and Niles. (Dkt. 228 at 1-2.). The asset
restraint proceedings are ongoing; Soleil has been directed to appear and testify on April 10, 2018
about his receipt and distribution of proceeds from a property sale by Vannguard in 2013. (1/30/18
Order Granting Motion to Adjourn Conference.)
3
court to consider whether the unchallenged facts constitute a legitimate cause of action, since a
party in default does not admit conclusions of law.” Rolls-Royce PLC v. Rolls-Royce USA Inc.,
688 F. Supp. 2d 150, 153 (E.D.N.Y. 2010) (quotation marks omitted) (alteration in original). A
district court is empowered, under Rule 55(b)(2) of the Federal Rules of Civil Procedure (“Rule
55(b)(2)”), in the exercise of its discretion, to “‘conduct hearings or make referrals’ as may be
necessary, inter alia, to determine the amount of damages or establish the truth of the plaintiff’s
allegations.” Mickalis, 645 F.3d at 129 (citing Fed. R. Civ. P. 55(b)(2)(B)–(C)).
II.
Entry of Default Against Defendants
The “typical Rule 55 case [is one] in which a default has entered because a defendant failed
to file a timely answer.” Id. (quotation marks omitted) (alteration in original). The Court
previously noted that this was the case with Local and the Partnership Corporations, which failed
to answer or move against the Third Amended Complaint after being properly served. (Dkt. 220,
at 3.) The Partnership Corporations also failed to enter an appearance in a subsequent conference
before the Court on November 23, 2015. (Id.) Therefore, the entry of default against Local and
the Partnership Corporations was proper.
“[A] district court is also empowered to enter a default against a defendant [that] has failed
to . . . otherwise defend.” Mickalis, 645 F.3d at 129 (quotation marks omitted) (alterations in
original). The Second Circuit has “embraced a broad understanding of the phrase ‘otherwise
defend.’” Id. It has found entry of default proper in a variety of circumstances, i.e., where a
defendant has failed to appear for trial after a lack of diligence in pre-trial proceedings, Brock v.
Unique Racquetball & Health Clubs, Inc., 786 F.2d 61, 64–65 (2d Cir. 1986); where a defendant
has willfully disregarded court orders, Eagle Assocs. v. Bank of Montreal, 926 F.2d 1305, 1310
4
(2d Cir. 1991); and where a defendant has refused to participate further in litigation, Mickalis, 645
F.3d at 129–30.
The Court previously held that Vannguard failed to “otherwise defend” against the current
litigation. (Dkt. 220, at 5.) Even though Vannguard participated at various points in this litigation,
Vannguard refused, at least as of January 29, 2016, to respond to the litigation, seemingly because
there is no longer any corporate entity left to do so. (See, e.g., Dkt. 153, at 3 (“Vannguard is
currently an empty entity with no directors, employees, properties, interests, etc.”; “Vannguard
only has one volunteer agent left—[Soleil],” and he “ha[d] only one authorized purpose—
Vannguard’s dissolution”).) As a result, the Court found that entry of default against Vannguard
was proper. (Dkt. 220, at 6.)
Like Vannguard, Niles also failed to “otherwise defend” himself in the present action.
During a hearing on August 8, 2016, counsel for Niles stated, “it is unclear whether Niles can or
will continue to defend himself in this litigation.” (8/8/16 Minute Entry.) The Court set a
telephonic conference for March 2, 2017 to discuss Niles’s continuing involvement in the case,
and counsel for Niles represented that Niles may not defend this action at trial. (3/7/17 Minute
Entry.) In a letter filed on March 9, 2017, Niles notified the Court that “[a]t this juncture,
Defendant is not going to defend against Plaintiffs’ action at trial, provided that there are no
material changes in the status of the case, which we do not anticipate.” (Dkt. 254, at 1.) On March
10, 2017, this Court directed Plaintiffs to move for a default order and thereafter a default judgment
against Niles (3/10/17 Order); Plaintiffs have since complied (Dkt. 259). The Court will now
address the merits of Plaintiffs’ motion for default judgment against all of the defendants, including
Niles. The Court will also address Plaintiffs’ motion to dismiss the counterclaim against Plaintiff
Sonya Coley.
5
III.
Defendants Qualify as Employers Under the FLSA and NYLL
Liability under the FLSA extends only to “employers,” defined as “any person acting
directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. § 203(d).
“Employ” means to “suffer or permit to work”. Id. at § 203(g). These definitions “sweep broadly”
in “identifying the persons or entities who qualify as ‘employers’ subject to [the FLSA],” Barfield
v. N.Y.C. Health & Hosps. Corp., 537 F.3d 132, 140 (2d Cir. 2008), and have a “striking breadth”
meant to “cover some parties who might not qualify . . . under a strict application of traditional
agency law principles,” Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 326 (1992). For the
following reasons, the Court finds that Defendants Niles, Vannguard, and the Partnership
Corporations are employers under the FLSA and NYLL
A.
Vannguard, Local, and the Partnership Corporations Were
Plaintiffs’ Employers Under the FLSA and the NYLL
The FLSA’s requirements apply “pursuant to either ‘individual’ or ‘enterprise’ coverage,”
the former encompassing individuals “engaged directly in interstate commerce or in the production
of goods for interstate commerce” and the latter, “substantially broaden[ing] the scope of [FLSA],”
encompassing “any employee of an enterprise engaged in interstate commerce.” Tony & Susan
Alamo Found. v. Sec’y of Labor, 471 U.S. 290, 295 n.8 (1985); see also Jacobs v. N.Y. Foundling
Hosp., 577 F.3d 93, 96 (2d Cir. 2009) (FLSA’s requirements apply “if an employee either: (1) is
engaged in commerce or in the production of goods for commerce, or (2) is employed in an
enterprise engaged in commerce or in the production of goods for commerce”) (quotation marks
omitted) (emphasis in original).
Enterprise coverage “has been interpreted broadly by the courts.” Ethelberth v. Choice
Sec. Co., 91 F. Supp. 3d 339, 355 (E.D.N.Y. 2015). Enterprise liability under the FLSA extends
to entities that: (1) perform related activities “for a common business purpose”; (2) have
6
“employees engaged in commerce or in the production of goods for commerce, or . . . employees
handling, selling, or otherwise working on goods or materials that have been moved in or produced
for commerce by any person”; and (3) have an “annual gross volume of sales made or business
done [] not less than $500,000.” 29 U.S.C. § 203(r)–(s).
This Court previously held that Plaintiffs’ allegations are sufficient to establish that
enterprise liability extended to Vannguard, Local, and the Partnership Corporations under the
FLSA. (Dkt. 220, at 15 (holding, in prior order granting Plaintiffs’ motion for default judgment,
that Vannguard and Partnership Corporations are liable as employers).) Vannguard, Local, and
the Partnership Corporations: (1) performed activities through contracts with New York City for
the common business purposes of providing services to disadvantaged teens and young adults; (2)
used and worked with goods that have been moved in or produced in interstate commerce; and (3)
had an annual gross volume of business that was not less than $500,000. (Dkt. 100, at ¶¶ 4-6.)
Vannguard was clearly Plaintiffs’ employer: Vannguard hired Plaintiffs (id. at ¶ 28), issued
Plaintiffs’ paychecks, albeit belatedly on many occasions (id. at ¶¶ 43–46), covered Plaintiffs’
health insurance and retirement plans (id. at ¶ 35), withheld taxes (id. at ¶ 36), provided Plaintiffs’
W-2 and W-4 tax forms classifying Plaintiffs as employees (id. at ¶ 37), and “was responsible for
providing the instrumentalities by which the work was to be done,” i.e., “computers, office
equipment, and office supplies,” (id. at ¶ 40).
B.
Niles Was Plaintiffs’ Employer Under the FLSA
To determine who qualifies as an “employer” for purposes of individual liability, the
Second Circuit looks to the factors enumerated in Carter v. Dutchess Cmty. Coll., 735 F.2d 8 (2d
Cir. 1984) (the “Carter factors”), which are “whether the alleged employer (1) had the power to
hire and fire the employees, (2) supervised and controlled employee work schedules or conditions
7
of employment, (3) determined the rate and method of payment, and (4) maintained employment
records.” Id. at 12. Satisfaction of these factors is sufficient, but not necessary, to establish an
employer-employee relationship. Zheng v. Liberty Apparel Co., 355 F.3d 61, 71 (2d Cir. 2003).
The Court considers Niles to be Plaintiffs’ employer because he satisfied all of the Carter
factors. At the May 3, 2016 hearing, Niles admitted that, during the relevant period, he served as
executive director for both Vannguard and Local and that he held the position of general manager
for Vannguard. (5/3/2016 Hearing Tr., Dkt. 193, at 19–20.) He testified that at Vannguard, he
had employees under him and was responsible for the day-to-day direction of the workforce, and
that as executive director, he was authorized to sign checks on behalf of Vannguard and Local.
(Id. at 20–21.) Similarly, in Niles’s answer to Plaintiffs’ Second Amended Complaint, he admitted
Plaintiffs’ allegation that “[a]s Executive Director and General Manager, defendant Niles
possessed the power to control the plaintiffs[, and] was authorized to hire, fire, discipline, assign
employees, set work schedules, determine the rate and method of wage payments, establish
classification of employees and maintain employment records.” (Dkt. 68, at ¶ 10; Dkt. 70, at ¶ 3.)
For these reasons, Niles qualifies as one of Plaintiffs’ employers under the FLSA.
C.
Defendants Were Plaintiffs’ Employers Under the NYLL
The NYLL defines “employer” to include “any person . . . employing any individual in any
occupation, industry, trade, business or service” or “any individual . . . acting as employer.” Teri
v. Spinelli, 980 F. Supp. 2d 366, 373 (E.D.N.Y. 2013) (citing NYLL §§ 190(3), 651(6)) (quotation
marks omitted). The NYLL and FLSA definitions are nearly identical, and, as a result, “[d]istrict
courts in this Circuit have interpreted the definition of employer under the [NYLL] coextensively
with the definition used by the FLSA,” id. (quotation marks and citation omitted), and have
“regularly applied the same factors and tests to determine whether entities are joint employers
8
under the NYLL,” id. at 375. NYLL also permits liability under the “single employer” doctrine.
See, e.g., Ayala v. Your Favorite Auto Repair & Diagnostic Ctr., Inc., 14-CV-5269 (ARR)(JO),
2016 WL 5092588, at *16 (E.D.N.Y. Sept. 19, 2016) (“The ‘single integrated enterprise doctrine’
allows for multiple defendants to be jointly and severally liable for any FLSA and NYLL
violations.”). Thus, for the same reasons discussed with respect to the FLSA, the Court finds that
all Defendants qualify under the NYLL as Plaintiffs’ “employer”.
III.
Defendants’ Liability under the FLSA and NYLL
A.
The FLSA
The FLSA requires an employer to compensate employees, other than those falling into
specific exemptions, for all hours worked, at the prevailing minimum wage, and provide overtime
compensation for hours worked over 40 in a given workweek. 29 U.S.C. §§ 206, 207. In addition,
courts have “long interpreted [the FLSA] to include a prompt payment requirement.” Rogers v.
City of Troy, 148 F.3d 52, 55 (2d Cir. 1998).
Plaintiffs allege that Defendants violated the FLSA by: (1) depriving Plaintiffs of straight
time and overtime pay (including forcing them to work off the clock); (2) misclassifying Plaintiffs
as exempt from the minimum wage and overtime requirements of the FLSA (even though their
tasks did not meet the criteria for those exemptions); (3) discharging Plaintiffs before December
31, 2012 and refusing to pay a promised “settlement package”; (4) failing to make, keep, and
preserve records of Plaintiffs’ wages, hours, and conditions and practices of employment; (5)
failing to give certain required notices regarding employers’ obligations under the law; and (6)
failing to pay Plaintiff Elizabeth Wright her regular wages. (Dkt. 100, at ¶¶ 157–163.)
Plaintiffs’ allegations are supported by admissions made by Niles, Vannguard’s Executive
Director, prior to his default in this litigation. Among other things, Niles admitted to “author[ing]
9
letters on behalf of plaintiffs . . . informing [their creditors] . . . that defendant Vannguard had been
unable to meet payroll obligations and these plaintiffs ‘may be presently delinquent in their
account with you . . . through no fault of [their] own.’” (SAC, Dkt. 68, at ¶ 35; Niles’s Answer to
SAC (“Niles’s SAC Ans.”), Dkt. 70, at ¶ 3.) Niles admitted that for a 12-week period before
August 7, 2012, Vannguard “had not paid the plaintiffs wages earned on their regular pay days”
and that Plaintiffs complained directly to the Vannguard board at an August 7, 2012 meeting about
the hardships Plaintiffs were suffering as a result of Vannguard’s repeated failures to pay them
during this 12-week period. (SAC, at ¶¶ 37-42; Niles’s SAC Ans., at ¶ 3.) With respect to these
events, Niles also testified that Soleil informed the Vannguard staff that they would receive their
paychecks by August 10, 2012, but that Vannguard failed to pay them. (SAC, at ¶¶ 38-43; Niles’s
SAC Ans., at ¶ 3.)
At a hearing held on May 3, 2016, Niles admitted multiple times that Vannguard employees
were routinely paid late. In testifying about the $300,000 “severance payment” he withdrew from
the Vannguard account, Niles attempted to justify it by claiming that Vannguard owed him
$720,000 in back pay and that “[t]here were all these deficits that Vannguard was trying to catch
up on and payroll.” (5/3/16 Hearing Tr., Dkt. 193, at 46, 74.) He also stated, “we often . . . missed
payroll, and that seemed to have been almost characteristic of the nature of the business that
Vannguard was in,” although he claimed that Vannguard’s staff was paid prior to Niles receiving
his severance package. (Id. at 48.) Thus, Plaintiffs’ allegations and the admissions of Defendant
Niles are sufficient to establish that Defendants violated the FLSA’s requirements regarding the
compensation of employees at the prevailing minimum wage, overtime compensation, and the
prompt and full payment of wages.
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B.
NYLL
The Court’s analysis applies equally to Plaintiffs’ NYLL allegations, because “[t]he NYLL
and the FLSA are analytically nearly identical.” Saucedo v. On the Spot Audio Corp., 16-CV451(CBA)(CLP), 2016 WL 8376837, at *6 (E.D.N.Y. Dec. 21, 2016), report and recommendation
adopted, 16-CV-451(CBA)(CLP), 2017 WL 780799 (E.D.N.Y. Feb. 28, 2017); see Santillan v.
Henao, 822 F. Supp. 2d 284, 292 (E.D.N.Y. 2011) (NYLL is the “state analogue” to the FLSA and
“otherwise mirrors the FLSA in compensation provisions regarding minimum hourly wages and
overtime”). The NYLL requires that covered employees are paid “in accordance with the agreed
terms of employment.” Belizaire v. RAV Investigative and Sec. Servs. Ltd., 61 F. Supp. 3d 336,
354 (S.D.N.Y. 2014) (citing NYLL § 191(1)(d)) (discussing these provisions of the FLSA and
NYLL as similar); see also NYLL § 191(1)(a), (c) (also imposing this requirement).
Plaintiffs claim that Defendants violated the NYLL by, inter alia: (1) depriving Plaintiffs
of straight time and overtime pay (including forcing them to work off the clock); (2) delaying the
issuance of paychecks beyond the payments’ due dates; (3) misclassifying Plaintiffs as exempt
from the minimum wage and overtime requirements of NYLL (even though their tasks did not
meet the criteria for those exemptions); (4) discharging Plaintiffs before December 31, 2012 and
refusing to pay a promised “settlement package” in December 2012; (5) altering Plaintiff Jones’s
terms and conditions of employment in retaliation for filing the Complaint; (6) failing to make,
keep, and preserve records of Plaintiffs’ wages, hours, and conditions and practices of
employment; (7) failing to give certain required notices regarding employers’ obligations under
the law; (8) making partial payments of wages earned under Plaintiffs’ appropriate salary rate; (9)
failing to pay Plaintiffs their vacation hours; and (10) failing to pay Plaintiff Elizabeth Wright her
11
regular wages. (Dkt. 100, at ¶¶ 164–174.) As with Plaintiffs’ FLSA claims, these allegations are
sufficient to establish violations of NYLL.
In addition to these allegations and Niles’s other numerous admissions relating to
Vannguard’s failure to promptly or fully compensate Plaintiffs, in his answer to the SAC, Niles
admitted that “[t]he defendants violated the New York Labor Law by delaying issuance of
paychecks beyond the date payment was due” and “by making partial payments of wages earned
under the plaintiffs[’] appropriate salary rate.” (SAC, at ¶ 150, 157; Niles’s SAC Ans., at ¶ 3.)
As with Plaintiffs’ FLSA claims, the SAC’s allegations and Niles’s admissions establish
violations of the NYLL’s requirements of prompt and full payment of wages.
IV.
Joint and Several Liability
Plaintiffs seek to have Defendants held jointly and severally liable for damages. As stated
above, corporations and corporate officers with operational control over employees both fit the
definition of “employer” under the FLSA and NYLL. Khurana v. JMP USA, Inc., 14-CV-4448,
2017 WL 1251102, at *9 (E.D.N.Y. Apr. 5, 2017). Courts have held that establishing joint and
several liability under the FLSA and NYLL requires no further analysis. See Ansoumana v.
Gristede’s Operating Corp., 255 F. Supp. 2d 184, 189 (S.D.N.Y. 2003) (quoting 29 C.F.R. §
791.2(b)) (“‘[J]oint employment’ arises when the employee ‘performs work which simultaneously
benefits two or more employers’ and ‘one employer is acting directly or indirectly in the interest
of the other employer (or employers) in relation to the employee.’”). Thus, all Defendants are
jointly and severally liable for the entire amount of damages awarded in this case.
V.
Statute of Limitations
Plaintiffs face no obstacle to obtaining relief based on the FLSA’s or NYLL’s statute of
limitations periods. The FLSA provides for a two-year statute of limitations period, which may
12
be extended to three years upon a showing that the FLSA violations were willful. 29 U.S.C. §
255(a). The NYLL has a six-year statute of limitations period. NYLL § 663(3).
The Court finds that there is sufficient evidence that Defendants’ FLSA violations were
willful. As noted, Niles has admitted that during an August 7, 2012 meeting, Plaintiffs informed
Vannguard board members about the organization’s repeated failures to pay them, and that Soleil
informed the Vannguard staff that they would be paid by August 10, 2012, which did not, in fact,
occur. (Dkt. 68, at ¶¶ 38-43; Dkt. 70, at ¶ 3.) This evidence, combined with Niles’s testimony
about Vannguard “often” missing payroll (5/3/16 Hearing Tr., Dkt. 193, at 46-48), gives rise to a
legitimate inference that Defendants’ violations were willful, and thus the FLSA’s three-year
statute of limitations applies.
Given the three-year statute of limitations applicable under the FLSA and the six-year
statute of limitations applicable under the NYLL, Plaintiffs’ FLSA and NYLL claims were timely
filed.
VI.
Vannguard’s and Niles’s Counterclaims against Sonya Coley
In its Answer to the SAC, Vannguard filed a counterclaim against Plaintiff Sonya Coley,
alleging that Coley failed to report employee complaints to the board of directors (Dkt. 71, at ¶
30), conspired with employees to conceal and exaggerate hours worked (id. at ¶¶ 31-32), and
endorsed timesheets that were filled out incorrectly (id. at ¶ 38). Niles filed a counterclaim alleging
that Coley knew about employee complaints and failed to report them to the board of directors.
(Dkt. 70, at ¶¶ 15-20.) Both Vannguard and Niles have defaulted and, as a result, the Court now
dismisses their counterclaims against Plaintiff Coley. See Kahan v. Chase Bank, 10-CV-335
(KAM), 2012 WL 947423 at *1 (E.D.N.Y. Mar. 20, 2012) (granting Defendant’s motion for
default judgment and dismissing Plaintiff’s counterclaims).
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VII.
Damages
The Court previously reserved any damages determination as to Vannguard and the
Partnership Corporations pending a liability determination as to Niles. (Dkt. 220 (granting default
judgments, but deferring damages inquest until resolution of liability determination as to Niles).)
The Court has found that Niles is jointly and severally liable with Defendants Vannguard, Local,
and the Partnership Corporations for the total amount of damages.
Under both the FLSA and NYLL, an employer is required to maintain “records of the
wages, hours, and persons employed by him.” Rodriguez v. Queens Convenience Deli Corp., 09–
cv–1089 (KAM) (SMG), 2011 WL 4962397, at *2 (E.D.N.Y. Oct. 18, 2011) (citation omitted).
Where, as here, Defendants failed to produce the requisite records, “a plaintiff may meet his or her
burden of establishing how many hours he or she worked ‘by relying solely on his or her
recollection.’” Id. (quoting Rivera v. Ndola Pharm. Corp., 497 F. Supp. 2d 381, 388 (E.D.N.Y.
2007). As Defendants have failed to produce relevant records, the Court may rely on Plaintiffs’
recollections regarding their hours and pay in conducting its inquest. Nevertheless, the Court must
ensure that Plaintiffs’ approximations and estimates are reasonable and appropriate. See Jemine
v. Dennis, 901 F. Supp. 2d 365, 376–77 (E.D.N.Y. 2012).
The Court will address each of the different types of damages claimed by Plaintiffs—i.e.,
vacation pay, overtime, underpaid wages, and unpaid wages—along with liquidated and statutory
damages.
A.
Vacation Pay
Under the NYLL, Plaintiffs seek earned vacation pay, at their regular hourly rate, claiming
that Vannguard’s Personnel Policies and Procedures entitled them to vacation pay accrued.
(Plaintiffs’ Memorandum of Law in Support of Plaintiffs’ Request for Damages (“Pls.’ Br.”), Dkt.
14
296, at 15.) Plaintiffs assert that each Plaintiff is entitled to the following hours of vacation pay:
Ms. Coley, 710 hours; Ms. Hall, 182.75 hours; Ms. Johnson, 133.50 hours; Mr. Jones, 403 hours;
Ms. Richardson, 96.25 hours; Ms. Taylor, 295.55 hours; Ms. Wright, 850 hours; and Mr. Pope,
$7,914.43 cash value of earned vacation pay. (Id.)
Plaintiffs may recover vacation pay under § 198 of the NYLL, because vacation pay is
covered under the definition of “wages.” See N.Y. Lab. Law §§ 190, 198-c (McKinney’s). “An
employee’s entitlement to receive payment for accrued, unused vacation time upon termination of
employment is governed by the terms of the employer’s publicized policy.” Tubo v. Orange Reg’l
Med. Ctr., 690 F. App’x 736, 740 (2d Cir. 2017). The NYLL requires employers to “notify [their]
employees in writing or by publicly posting the employer’s policy on sick leave, vacation, personal
leave, holidays and hours.” N.Y. Lab. Law § 195 (McKinney’s).
Vannguard’s Personnel Policies and Procedures provide that “full-time employees are
entitled to vacation pay, which is accrued at the rate of one and one-quarter (1-1/4) days per month.
All regular, full-time employees start accruing vacation pay from the date of employment.” (Dkt.
100, ¶ 34(c).) The same document also provides that “[e]mployees will receive payment upon
resigning for their accrued annual leave.” (Personnel Policies and Procedures, Dkt. 278-3, at 15.)
Accordingly, Plaintiffs shall recover unpaid vacation pay at their regular hourly rates,
pursuant to the calculations set forth below:
Time Period
Coley
Wage
Rate
Accrued Vacation
Hours
Vacation Pay
Owed
11/09/06 11/26/122
$28.71
710.00
$20,384.10
The Court uses 11/26/12 as the end date for Plaintiffs’ damages because Vannguard
posted a resolution from its Board of Directors giving a “notice of termination” of all employees
except two, Kelvin Hicks and Wendy Moffat, and stating that the organization was “closed for
business” on that date. (Dkt. 100, at ¶69.) Plaintiffs allege damages up until the time that
2
15
Hall
Johnson
Jones
Richardson
Taylor
Wright
Pope
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 09/14/12
11/09/06 –
09/21/12
$14.28
182.75
$2,609.67
$21.97
133.50
$2,933.00
$17.58
403.00
$7,084.74
$15.10
96.25
$1,453.383
$13.36
295.55
$3,948.55
$14.16
850.00
$12,036.00
$15.30
N/A
$7,914.43
$58,363.87
Total
B.
Overtime
Plaintiffs seek overtime pay for hours worked in excess of 40 hours during a given
workweek under both the FLSA and the NYLL. (Pls.’ Br., at 13-14.) Plaintiffs assert that Ms.
Hall, Ms. Richardson, Ms. Taylor, Ms. Wright, and Mr. Pope regularly worked overtime and were
not paid accordingly. (Id.)
Under both the FLSA and NYLL, for overtime hours of work, the employer must pay the
employee one-and-a-half times the employee’s regular rate of compensation. Chowdhury v.
Hamza Exp. Food Corp., 14-CV-150, 2015 WL 5541767, at *5 (E.D.N.Y. Aug. 21, 2015) (citing
both FLSA and NYLL overtime provisions), report and recommendation adopted, 14-CV-150,
2015 WL 5559873 (E.D.N.Y. Sept. 18, 2015). “Although plaintiffs are entitled to recover unpaid
Vannguard closed. The end date for the purposes of calculating damages should not be confused
with the statute of limitations dates, which, as explained supra, were determined by the filing of
the original complaint on 11/9/12. (See Dkt. 1).
3
Plaintiffs claim in their motion that the vacation pay amount owed to Richardson is
$1,453.37. The difference is due to rounding. Other discrepancies are caused by the same reason,
if not specifically explained.
16
. . . overtime pay under both the FLSA and the Labor [L]aw, they may not recover twice.” Jin M.
Cao v. Wu Liang Ye Lexington Rest., Inc., 08-CV-3725, 2010 WL 4159391, at *3 (S.D.N.Y. Sept.
30, 2010). Plaintiffs should recover the higher award between the FLSA and NYLL. Kernes v.
Glob. Structures, LLC, 15-CV-00659, 2016 WL 880199, at *9 (S.D.N.Y. Mar. 1, 2016). Here, the
NYLL award for unpaid overtime mirrors that of the FLSA, and the timeframe is fully covered by
the limitations periods under both statutes.
“[B]ona fide executive, administrative, or professional” employees are “exempt from the
overtime pay provision of the FLSA.” Reiseck v. Universal Commc’ns of Miami, Inc., 591 F.3d
101, 105 (2d Cir. 2010); 29 U.S.C. § 213. The NYLL “applies the same exemptions as the FLSA.”
Id. Under rules promulgated by the Secretary of Labor pursuant to the FLSA, 4 there are three
separate tests for determining whether an employee falls under this exemption: (1) the employee
must be “compensated on a salary or fee basis at a rate of not less than $455 per week”; (2) the
employee’s primary duty must be “the performance of office or non-manual work directly related
to the management or general business operations of the employer or the employer’s customers”;
(3) the employee’s primary duty must include “the exercise of discretion and independent
judgment with respect to matters of significance.” 29 C.F.R. § 541.200. “[The] employer bears
the burden of proving that its employees fall within an exempted category.” Ramos v. Baldor
Specialty Foods, Inc., 687 F.3d 554, 558 (2d Cir. 2012).
In their Answer to the SAC, Defendants stated that Ms. Hall, Ms. Taylor, Ms. Wright, and
Mr. Pope did not qualify for the exemption, but alleged that Ms. Richardson did. (Niles’s Answer
to Plaintiffs’ Second Amended Complaint, Dkt. 70, at ¶¶ 1, 3; VUIA’s Answer to Amended
4
The Secretary amended the relevant regulations on May 23, 2016. Because the
amendment does not provide retroactive effect, this Court relies on the regulations in effect during
the relevant timeframe.
17
Complaint, Dkt. 71, at ¶¶ 1, 3; see SAC, at ¶¶ 76, 91, 104, 115, 124, 135.) As Defendants have
failed to support their assertion about Ms. Richardson’s primary duties, the Court relies on
Plaintiffs’ claim that her duties included maintaining records and files, answering telephone calls,
providing callers with routine information, and maintaining the Executive Director’s
appointments, among other duties. (Dkt. 100, at ¶ 117.) These responsibilities do not involve “the
exercise of discretion and independent judgment” in “the comparison and the evaluation of
possible courses of conduct.” 29 C.F.R. § 541.202. Therefore, Ms. Richardson is not exempt from
the overtime pay provision of the FLSA.
Accordingly, Plaintiffs shall recover their unpaid overtime wages at one-and-a-half their
regular hourly rates, as calculated below:
Time
Period
Coley
Hall
Johnson
Jones
Richardson
Taylor
Wright
Pope
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 09/14/12
11/09/06 –
09/21/12
Number of
Weeks
Overtime
Wage Rate
Overtime
Hours per
Week
Overtime
Wages Owed
N/A
N/A
N/A
N/A
315
$21.42
3
$20,241.90
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
315
$22.65
1
$7,134.75
315
$20.04
5
$31,563.00
305
$21.24
5
$32,391.00
306
$22.95
10
$70,277.00
$161,607.65
Total
18
C.
Underpaid Wages
Plaintiffs rely on the NYLL to recover underpaid wages resulting from Defendants’
occasional partial payments. (Dkt. 100, at ¶ 177.) Plaintiffs claim that Ms. Richardson was
continuously underpaid by $28.50 every week from November 9, 2006 to August 10, 2012, and
by $251.57 every week from August 13, 2012 to November 26, 2012. (Id. at ¶¶ 122, 123.)
Plaintiffs further claim that Mr. Jones was continuously underpaid by $115.38 every week from
July 1, 2011 to November 26, 2012. (Id. at ¶ 110.) Additionally, Plaintiffs claim that Defendants
failed to pay Ms. Wright her wages for a roughly one-month period between August 13, 2012 and
September 14, 2012. (Id. at ¶ 145.)
The NYLL provides “the right to recover full wages, benefits and wage supplements and
liquidated damages accrued during the six years previous to the commencing” of an action. N.Y.
Lab. Law § 198 (McKinney’s). “[C]ourts have awarded straight time rates higher than the
minimum wage,” where the parties agreed to the rate. Villar v. Prana Hosp., Inc., 14-CV8211(RA)(JCF), 2017 WL 1333582, at *4 (S.D.N.Y. Apr. 11, 2017). The employer is required to
“notify his or her employees in writing of any changes to [the rate of pay] at least seven calendar
days prior to the time of such changes.” N.Y. Lab. Law § 195 (McKinney’s).
Defendants failed to pay, and underpaid, Plaintiffs’ regular wages on multiple occasions
during the relevant timeframe. Even though Vannguard notified Ms. Richardson of an adjustment
to her pay on the pay stub that she received for the two-week pay period of November 3-16, 2012,
the adjustment only took effect on November 26, 2012, thus not affecting the Court’s calculation.
Accordingly, Plaintiffs shall recover underpaid wages for the straight hours they worked
at their regular hourly rates, pursuant to the calculation set forth below:
19
Time Period
Coley
Hall
Johnson
Jones
Richardson
Taylor
Wright
Pope
Total
D.
N/A
N/A
N/A
07/01/11 11/26/12
11/09/06 08/10/12
08/13/12 11/26/12
N/A
08/13/12 –
09/14/12
N/A
Number of Pay
Periods
Biweekly
Wage
Biweekly
Wage Paid
Wages
Owed
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
36.5
$1,230.76
$1,000.00
$8,422.74
150
$1,057.00
$1,000.00
$8,550.00
7.5
$1,057.00
$553.85
$3,773.63
N/A
N/A
N/A
N/A
2.5
$991.34
$0
$2,478.35
N/A
N/A
N/A
N/A
$23,224.72
Unpaid Gap-Time Wages
Plaintiffs seek unpaid wages for the straight hours they worked in excess of 35 hours in a
given workweek at their regular hourly rates under the NYLL. (Pls.’ Br., at 6.) Plaintiffs assert
that Ms. Hall, Mr. Jones, Ms. Richardson, Ms. Taylor, Ms. Wright, and Mr. Pope regularly worked
over thirty-five hours every week and were not compensated for those hours. (Id. at 11.)
“A gap-time claim is one in which an employee has not worked 40 hours in a given week
but seeks recovery of unpaid time worked, or in which an employee has worked over 40 hours in
a given week but seeks recovery for unpaid work under 40 hours.” Lundy v. Catholic Health Sys.
of Long Island Inc., 711 F.3d 106, 115 (2d Cir. 2013). A gap-time claim is consistent with the
language of NYLL § 663(1).5 Id. NYLL § 663(1) provides that “[i]f any employee is paid by his
5
The FLSA requires payment of minimum wages and overtime wages only and does not
provide a cause of action for unpaid gap time. Nakahata v. New York-Presbyterian Healthcare
Sys., Inc., 723 F.3d 192, 201 (2d Cir. 2013).
20
or her employer less than the wage to which he or she is entitled under the provisions of this article,
he or she shall recover in a civil action the amount of any such underpayments.” The Court,
therefore, addresses Plaintiffs’ gap-time claim under the NYLL.
In calculating the amount owed for a gap-time claim, courts have used both the minimum
wage and an employee’s regularly hourly rate. For example, the district court in McGlone v.
Contract Callers Inc., 114 F. Supp. 3d 172, 173 (S.D.N.Y. 2015) held that the wage to which a
plaintiff is entitled under NYLL § 663 is the minimum wage because that provision references
Article 19 of the NYLL, which is the Minimum Wage Act.6 However, the same court, in Soto v.
Armstrong Realty Mgmt. Corp., relied on NYLL § 198(3) and used the employee’s regular hourly
rate, instead of the minimum wage, to calculate gap-time wages. Soto, 15-CV-9283(AJN)(JCF),
2016 WL 7396687, at *2 (S.D.N.Y. Dec. 21, 2016), report and recommendation adopted, 15-CV9283(AJN)(JCF), 2017 WL 2191625 (S.D.N.Y. May 17, 2017); Hernandez v. NJK Contractors,
Inc., 09-CV-4812(RER), 2015 WL 1966355, at *42 (E.D.N.Y. May 1, 2015) (“This unpaid
compensation should be calculated at Plaintiffs’ regular rate.”).
The Court chooses to apply Plaintiffs’ regular hourly rates to calculate the amount of
unpaid wages they are due under their gap-time claims. See Hernandez, 2015 WL 1966355, at
*42 (applying plaintiffs’ regular rate). The Court finds that this construction gives fuller effect to
the remedial purposes of NYLL. NYLL § 198(1)-(a) expressly provides that “any employee paid
less than the wage to which he or she is entitled under the provisions of this article” is entitled to
recover his or her “full wages” (emphasis added), and NYLL § 663 does not prohibit an award
based on an employee’s agreed-upon wages. This means that an employee has a cause of action
6
Under Article 19—the Minimum Wage Act—“[e]very employer shall pay to each of its
employees for each hour worked a wage of not less than” the minimum wage. N.Y. Lab. Law §
652.
21
to recover the full amount of unpaid wages that he or she is entitled to under NYLL § 198, in
addition to seeking payment of minimum wages under NYLL § 663. If, in response to a gap-time
claim, the Court were to only award compensation at the minimum wage rate, the employer would
be paying the employee less than what the employer should have paid the employee for his or her
work, and the employee would recover less than what he or she had agreed to work for. Thus, the
Court finds that where the employer has agreed to pay the employee a certain wage, that wage
should be applied to any gap-time claim filed by the employee.
Accordingly, Plaintiffs shall recover their unpaid wages, pursuant to their gap-time claim,
for the straight hours they worked at the regular hourly rate, as calculated below:
Time
Period
Coley
Hall
Johnson
Jones
Richardson
Taylor
Wright
Pope
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 09/14/12
11/09/06 09/21/12
Number of
Weeks
Wage
Rate
Total
Hours
GapTime
Hours
Gap-Time
Wages Owed
N/A
N/A
N/A
N/A
N/A
315
$14.28
43
5
$22,491.00
N/A
N/A
N/A
N/A
N/A
315
$17.58
40
5
$27,688.50
315
$15.10
41
5
$23,782.50
315
$13.36
45
5
$21,042.00
305
$14.16
45
5
$21,594.00
306
$15.30
50
5
$23,409.00
$140,007.00
Total
E.
Total Damages for Wages and Vacation Pay
The total damages that Plaintiffs shall recover for unpaid vacation pay and wages are as
follows:
22
Vacation
Pay Owed
Overtime
Wages Owed
Wages
Owed
Gap-Time
Wages Owed
Individual Total
Coley
Hall
Johnson
Jones
Richardson
Taylor
Wright
Pope
$20,384.10
$2,609.67
$2,933.00
$7,084.74
$1,453.38
$3,948.55
$12,036.00
$7,914.43
N/A
$20,241.90
N/A
N/A
$7,134.75
$31,563.00
$32,391.00
$70,277.00
N/A
N/A
N/A
$8,422.74
$12,323.63
N/A
$2,478.35
N/A
N/A
$22,491.00
N/A
$27,688.50
$23,782.50
$21,042.00
$21,594.00
$23,409.00
$20,384.10
$45,342.57
$2,933.00
$43,195.98
$44,694.26
$56,553.55
$68,499.35
$101,600.43
Total
$58,363.87
$161,607.65
$23,224.72
$140,007.00
$383,203.24
F.
Liquidated Damages
Plaintiffs seek liquidated damages under both the FLSA and NYLL for underpaid wages,
unpaid wages, overtime wages, and vacation pay. (Dkt. 100, at ¶ 177.)
The FLSA and NYLL both allow for liquidated damages. 29 U.S.C. § 216(b); N.Y. Lab.
Law § 198(1-a). The FLSA provides liquidated damages for unpaid minimum wages and unpaid
overtime compensation. 29 U.S.C. § 216(b). The NYLL provides liquidated damages calculated
based on “the total amount of the wages found to be due.” N.Y. Lab. Law § 198(1-a). “Wages
means the earnings of an employee for labor or services rendered” and “also includes benefits or
wage supplements,” which in turn includes “vacation, separation or holiday pay.” N.Y. Lab. Law
§§ 190, 198-c (McKinney’s).
Employers may only avoid liquidated damages under the FLSA by showing that the FLSA
breach was done in good faith, with reasonable grounds for believing that the action was not in
violation of the FLSA. Sines v. Serv. Corp. Int’l, 03-CV-5465, 2006 WL 3247663, at *4 (S.D.N.Y.
Nov. 8, 2006) (citing 29 U.S.C. § 260). Similarly, the NYLL requires liquidated damages absent
23
a showing of good faith. Luna v. Gon Way Construction Inc., 16-CV-1411, 2017 WL 835321, at
*14 (E.D.N.Y. Feb. 14, 2017) (citing N.Y. Lab. Law §§ 198(1-a), 663(1)).
Plaintiffs are not entitled to liquidated damages under both the FLSA and NYLL.
Chowdhury v. Hamza Express Food Corp., 666 F. App’x 59, 60-61 (2d Cir. 2016). Instead,
“[c]ourts should award damages under the statute that provides for the greater recovery.” Leon v.
Zita Chen, 16-CV-480, 2017 WL 1184149, at *9 (E.D.N.Y. March 29, 2017) (citation omitted).
Liquidated damages under the FLSA are “generally required” to be awarded in an amount equal
to the actual damages. Barfield, 537 F.3d at 150. On November 24, 2009, the New York
legislature reduced the amount of liquidated damages a plaintiff could recover under the NYLL, if
the employer is found to be willful, from one-hundred percent to “twenty-five percent of the total
wages found to be due”. N.Y. Lab. Law § 198(1–a). On April 9, 2011, the New York Legislature
changed this percentage back to “one-hundred percent”.7
This Court has found that Defendants acted willfully.
Coley v. Vannguard Urban
Improvement Ass’n, Inc., 12-CV-5565(PKC)(RER), 2016 WL 7217641, at *14 (E.D.N.Y. Dec.
13, 2016). Defendants have not made a showing of good faith under the FLSA or NYLL.
Plaintiffs are therefore entitled to liquidated damages under the FLSA for three years prior to the
filing of this lawsuit, and liquidated damages under the NYLL for six years prior to filing.
Plaintiffs filed their claims on November 9, 2012. (Dkt. 1.) Plaintiffs are entitled to the FLSA
7
The statute was first amended on November 24, 2009, to impose a presumption of
liquidated damages without a showing of willfulness and provide an affirmative defense of good
faith. STRENGTHENING WAGE AND HOUR PROTECTIONS FOR WORKING PEOPLE,
2009 Sess. Law News of N.Y. Ch. 372 (A. 6963) (McKinney’s). The statute was again amended
on April 9, 2011, to raise the amount of liquidated damages from 25% to 100% of any
underpayment. LABOR LAW--WAGE THEFT PREVENTION ACT, 2010 Sess. Law News of
N.Y. Ch. 564 (S. 8380) (McKinney’s). The Second Circuit held that both amendments were not
retroactive. Gold v. New York Life Ins. Co., 730 F.3d 137, 143 (2d Cir. 2013).
24
liquidated damages equal to 100% of any underpayment from November 9, 2009 to November 26,
2012. Plaintiffs are entitled to the NYLL liquidated damages equal to 25% of any underpayment
from November 9, 2006 to April 8, 2011 and 100% of any underpayment from April 9, 2011, and
November 26, 2012. Between November 9, 2009, and November 26, 2012, Plaintiffs are entitled
to liquidated damages under both the FLSA and the NYLL, but Plaintiffs shall only recover once.
This Court will address liquidated damages for each claim in turn.
i.
Vacation Pay
The Court has found that Plaintiffs are entitled to receive vacation pay owed to them after
their termination from Vannguard in 2012. Plaintiffs are also entitled to NYLL liquidated damages
equal to 100% of vacation pay. This calculation is set forth below:
NYLL Liquidated
Damages
Coley
Hall
Johnson
Jones
Richardson
Taylor
Wright
Pope
Time Period
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 11/26/12
11/09/06 09/14/12
11/09/06 –
09/21/12
Wage
Rate
Accrued
Vacation
Hours
NYLL Liquidated
Damages for Vacation
Pay
$28.71
710.00
$20,384.10
$14.28
182.75
$2,609.67
$21.97
133.50
$2,933.00
$17.58
403.00
$7,084.74
$15.10
96.25
$1,453.38
$13.36
295.55
$3,948.55
$14.16
850
$12,036.00
$15.30
N/A
$7,914.43
Total
$58,363.87
25
ii.
Overtime
With respect to liquidated damages for Plaintiffs’ overtime claims, the Court awards those
damages under the statute that allows Plaintiffs the greater recovery. Leon, 2017 WL 1184149, at
*9. For the period between November 9, 2006, and November 8, 2009, Plaintiffs shall recover the
NYLL liquidated damages of 25% of overtime pay owed because the only statute that provides for
recovery of liquidated damages before November 9, 2009 is the NYLL, based on its six-year
statute of limitations. For the period between November 9, 2009, and April 8, 2011, Plaintiffs
shall recover the FLSA liquidated damages of 100% of overtime pay owed.8 For the period
between April 9, 2011, and November 26, 2012, Plaintiffs shall recover the NYLL liquidated
damages of 100% of overtime pay owed. The Court awards damages under the NYLL for this last
period because Plaintiffs are entitled to recover the largest amount under statute, and the NYLL
allows for prejudgment interest on top of the overtime amount. See infra, Section G – Prejudgment
Interest. The liquidated damages calculation for the overtime pay due to Plaintiffs is set forth
below:
NYLL
Liquidated
Damages
Coley
Hall
Johnson
Time
Period
11/09/06
11/08/09
11/09/06
11/08/09
11/09/06
11/08/09
Number
of Weeks
Overtime
Wage
Rate
Overtime
Hours
Total
Overtime
NYLL
Liquidated
Damages for
Overtime
N/A
N/A
N/A
N/A
N/A
156
$21.42
3
$10,024.56
$2,506.14
N/A
N/A
N/A
N/A
N/A
8
As Plaintiffs are only entitled to liquidated damages equal to 25% of the overtime
compensation for the period between November 9, 2009, and April 8, 2011 under the NYLL, this
Court awards liquidated damages under the FLSA.
26
Jones
Richardson
Taylor
Wright
Pope
11/09/06
11/08/09
11/09/06
11/08/09
11/09/06
11/08/09
11/09/06
11/08/09
11/09/06
11/08/09
N/A
N/A
N/A
N/A
N/A
156
$22.65
1
$3,533.40
$883.35
156
$20.04
5
$15,631.20
$3,907.80
156
$21.24
5
$16,567.20
$4,141.80
156
$22.95
10
$35,802.00
$8,950.50
$20,389.59
Total
FLSA
Liquidated
Damages
Coley
Hall
Johnson
Jones
Richardson
Taylor
Wright
Pope
Time
Period
11/09/09 04/08/11
11/09/09 04/08/11
11/09/09 04/08/11
11/09/09 04/08/11
11/09/09 04/08/11
11/09/09 04/08/11
11/09/09 04/08/11
11/09/09 04/08/11
Number
of Weeks
Overtime
Wage Rate
Overtime
Hours
FLSA Liquidated
Damages for
Overtime
N/A
N/A
N/A
N/A
74
$21.42
3
$4,755.24
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
74
$22.65
1
$1,676.10
74
$20.04
5
$7,414.80
74
$21.24
5
$7,858.80
74
$22.95
10
$16,983.00
$38,687.94
Total
NYLL
Liquidated
Damages
Time
Period
Number
of Weeks
Overtime
Wage Rate
Overtime
Hours
NYLL Liquidated
Damages for
Overtime
Coley
04/09/11 11/26/12
N/A
N/A
N/A
N/A
27
Hall
Johnson
Jones
Richardson
Taylor
Wright
Pope
04/09/11 11/26/12
04/09/11 11/26/12
04/09/11 11/26/12
04/09/11 11/26/12
04/09/11 11/26/12
04/09/11 09/14/12
04/09/11 –
09/21/12
85
$21.42
3
$5,462.10
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
85
$22.65
1
$1,925.25
85
$20.04
5
$8,517.00
75
$21.24
5
$7,965.00
76
$22.95
10
$17,442.00
$41,311.35
Total
iii.
Underpaid Wages
Plaintiffs are entitled to recover underpaid wages under the NYLL. For the period between
November 9, 2006, and April 8, 2011, Plaintiffs shall recover the NYLL liquidated damages of
25% of underpaid wages. For the period between April 9, 2011, and November 26, 2012, Plaintiffs
shall recover the NYLL liquidated damages of 100% of underpaid wages. This calculation is set
forth below:
NYLL
Liquidated
Damages
Time
Period
Number of
Pay
Periods
Biweekly
Wage
Biweekly
Wage Paid
NYLL Liquidated
Damages for
Underpaid Wages
Coley
N/A
N/A
N/A
N/A
N/A
Hall
N/A
N/A
N/A
N/A
N/A
Johnson
N/A
N/A
N/A
N/A
N/A
36.5
$1,230.76
$1,000.00
$8,422.74
115
$1,057.00
$1,000.00
$1,638.75
35
$1,057.00
$1,000.00
$1,995.00
Jones
Richardson
07/01/11 11/26/12
11/09/06 04/08/11
04/09/11 –
08/10/12
28
08/13/12 11/26/12
7.5
$1,057.00
$553.85
$3,773.63
Taylor
N/A
N/A
N/A
N/A
N/A
Wright
08/13/12 –
09/14/12
2.5
$991.34
$0
$2,478.35
Pope
N/A
N/A
N/A
N/A
N/A
Total
iv.
$18,308.47
Unpaid Gap-Time Wages
Plaintiffs are entitled to recover unpaid gap-time wages under the NYLL. For the period
between November 9, 2006, and April 8, 2011, Plaintiffs shall recover the NYLL liquidated
damages of 25% of underpaid wages. For the period between April 9, 2011, and November 26,
2012, Plaintiffs shall recover the NYLL liquidated damages of 100% of underpaid wages. The
calculation of Plaintiffs’ unpaid gap-time wages is set forth below:
NYLL
Liquidated
Damages
Coley
Hall
Johnson
Jones
Richardson
Taylor
N/A
GapTime
Hours
N/A
NYLL Liquidated
Damages for GapTime Wages
N/A
$14.28
43
5
$4,105.50
85
$14.28
43
5
$6,069.00
N/A
N/A
N/A
N/A
N/A
230
$17.58
40
5
$5,054.25
85
$17.58
40
5
$7,471.50
230
$15.10
41
5
$4,341.25
85
$15.10
41
5
$6,417.50
230
$13.36
45
5
$3,841.00
85
$13.36
45
5
$5,678.00
Time
Period
Number
of Weeks
Wage
Rate
Total
Hours
N/A
11/09/06 04/08/11
04/09/11 –
11/26/12
N/A
11/09/06 04/08/11
04/09/11 –
11/26/12
11/09/06 04/08/11
04/09/11 –
11/26/12
11/09/06 04/08/11
04/09/11 –
11/26/12
N/A
N/A
230
29
Wright
Pope
11/09/06 04/08/11
04/09/11 –
09/14/12
11/09/06 04/08/11
04/09/11 –
09/21/12
230
$14.16
45
5
$4,071.00
75
$14.16
45
5
$5,310.00
230
$15.30
50
5
$4,398.75
76
$15.30
50
5
$5,814.00
$62,571.75
Total
v.
Total Liquidated Damages
The total liquidated damages, excluding liquidated damages for delayed payments, are as
follows:
NYLL
NYLL
NYLL
NYLL
FLSA
Liquidated
Liquidated Liquidated
Liquidated
Liquidated
Damages
Damages
Damages
Damages
Damages
for
for
for Gapfor
for
Vacation
Underpaid
Time
Overtime
Overtime
Pay
Wages
Wages
Individual
Total
Coley
$20,384.10
N/A
N/A
N/A
N/A
$20,384.10
Hall
$2,609.67
$7,968.24
N/A
$10,174.50
$4,755.24
$25,507.65
Johnson
$2,933.00
N/A
N/A
N/A
N/A
$2,933.00
Jones
$7,084.74
N/A
$8,422.74
$12,525.75
N/A
$28,033.23
Richardson
$1,453.38
$2,808.60
$7,407.38
$10,758.75
$1,676.10
$24,104.21
Taylor
$3,948.55
$12,424.80
N/A
$9,519.00
$7,414.80
$33,307.15
Wright
$12,036.00
$12,106.80
$2,478.35
$9,381.00
$7,858.80
$43,860.95
Pope
$7,914.43
$26,392.50
N/A
$10,212.75
$16,983.00
$61,502.68
Total
$58,363.87
$61,700.94
$18,308.47
$62,571.75
$38,687.94
$239,632.97
30
G.
Prejudgment Interest
Plaintiffs seek prejudgment interest “as allowed under the Fair Labor Standards Act and
the New York Labor Law.” (Dkt. 100, at ¶ 177.)
“[P]laintiffs are entitled to prejudgment interest on any compensatory damages awarded
under the NYLL for which there is no corresponding award of liquidated damages under FLSA.”
Tackie v. Keff Enterprises LLC, 14-CV-2074(JPO), 2014 WL 4626229, at *5 (S.D.N.Y. Sept. 16,
2014). “As FLSA liquidated damages are considered compensatory in nature and thus serve as a
form of pre-judgment interest, an additional award of interest on federal damages would be
inappropriate.”
Yuquilema v. Manhattan’s Hero Corp., 13-CV-461(WHP)(JLC), 2014 WL
4207106, at *11 (S.D.N.Y. Aug. 20, 2014), report and recommendation adopted, 13-CV-461,
2014 WL 5039428 (S.D.N.Y. Sept. 30, 2014) (quotation marks and citation omitted). “By
contrast, because liquidated damages provided for by the NYLL are considered punitive in nature,”
prejudgment interest is not duplicative of liquidated damages under the NYLL and Plaintiffs may
recover prejudgment interest for the portion of compensatory recovery under the NYLL. Id.
“Sections 5001 and 5004 of New York’s Civil Practice Law and Rules provide for a
prejudgment interest rate of nine percent, calculated where such damages were incurred at various
times from the date it was incurred or upon all of the damages from a single reasonable
intermediate date.” Li Ping Fu v. Pop Art Int’l, Inc., 10-CV-8562(DLC), 2011 WL 6092309, at
*2 (S.D.N.Y. Dec. 7, 2011) (citing N.Y. CPLR §§ 5001(b), 5004). Courts often choose “the
median date between the earliest ascertainable date the cause of action existed and the date the
action was filed or last date the cause of action existed.” Yuquilema, 2014 WL 4207106, at *12
(internal citation omitted). “The simple interest award is calculated by multiplying the principal
31
by the interest rate by the time period-from a singular, midpoint date-up until and including the
date judgment is entered.” Id. (quotation marks and citation omitted).
Here, Plaintiffs may recover prejudgment interest for unpaid wages, underpaid wages,
vacation pay, and the portion of overtime pay compensated under the NYLL.9 Plaintiffs’ cause of
action existed at the earliest on November 9, 2006 and at the latest on November 26, 2012. For
the purpose of calculating Plaintiffs’ prejudgment interest for the different claims, the appropriate
midpoint date from which the interest is calculated is November 18, 2009. The default judgment
was granted on August 5, 2016. Thus, the Court calculates prejudgment interest owed in this case
as set forth below:
Time
Period
Coley
Hall
Johnson
Jones
Richardson
Taylor
Wright
Pope
11/18/09 08/05/16
11/18/09 08/05/16
11/18/09 08/05/16
11/18/09 08/05/16
11/18/09 08/05/16
11/18/09 08/05/16
11/18/09 08/05/16
11/18/09 08/05/16
Number
of Years
Actual
Damages
FLSA
Liquidated
Damages
Prejudgment
Interest
6.71
$20,384.10
N/A
$12,309.96
6.71
$45,342.57
$4,755.24
$24,510.69
6.71
$2,933.00
N/A
$1,771.24
6.71
$43,195.98
N/A
$26,086.10
6.71
$44,694.26
$1,676.10
$25,978.67
6.71
$56,553.55
$7,414.80
$29,674.90
6.71
$68,499.35
$7,858.80
$36,620.83
6.71
$101,600.43
$16,983.00
$51,100.47
$208,052.86
Total
9
Courts do not award prejudgment interest on liquidated damages under FLSA, but they
do award prejudgment interest on liquidated damages under the NYLL. See Tackie, 2014 WL
4626229 at *6 (subtracting the FLSA liquidated damages from the total back pay in determining
prejudgment interest); Yuquilema, 2014 WL 4207106, at *11-12 (same).
32
H.
Liquidated Damages for Delayed Payments
Plaintiffs seek liquidated damages for 50 delayed wage payments between 2010 and 2012
under the prompt payment requirement of the FLSA and the NYLL.
A separate right to liquidated damages exists that “is not conditioned on default at the time
suit is begun.” Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 711 (1945). “[C]ourts have long
interpreted the [FLSA] to include a prompt payment requirement.” Rogers v. City of Troy, N.Y.,
148 F.3d 52, 55 (2d Cir. 1998). The FLSA requires that minimum wages and overtime wages for
the hours worked be paid when they become due. Id. at 55-56. Employees whose wages are not
timely paid are entitled to statutory damages, despite the fact that the employees received their full
wages prior to instituting their lawsuit. See Humphrey v. RAV Investigative & Sec. Servs. Ltd., 12CV-3581(NRB), 2016 WL 7190073, at *6 (S.D.N.Y. Nov. 29, 2016) (under FLSA, “the remedy
for untimely wages is limited to liquidated damages”). Under the FLSA, Plaintiffs are entitled to
liquidated damages equal to 100% of the minimum wages for the untimely payments. 29 U.S.C.
§ 216(b).
“The NYLL does not appear to provide a similar remedy.” Belizaire, 61 F. Supp. 3d at
360, n.22. Although the NYLL, like the FLSA, requires that covered employees be paid “in
accordance with the agreed terms of employment[,]” id. at 354; NYLL § 191(1)(c), the NYLL’s
remedy section, NYLL § 198, seems to be “geared to afford relief for unpaid wages, not for latepaid wages,” Belizaire, 61 F. Supp. 3d at 360, n.22; see Hussain v. Pakistan Int’l Airlines Corp.,
11-CV-932 (ERK) (VVP), 2012 WL 5289541, at *3 (E.D.N.Y. Oct. 23, 2012) (“The NYLL
contains no provision for private recovery for violations of its provisions regarding frequency of
payment”).
33
Despite the prompt payment requirement of the FLSA, the Second Circuit has no bright
line rule for determining what qualifies as an “unreasonable” amount of time for an employer to
delay paying its employees. Courts in this Circuit and elsewhere have held that two weeks is an
unreasonable amount of time for an employer to delay a paycheck. See Belizaire, 61 F. Supp. 3d
at 360, n.21 (finding “bounced checks and other paychecks delayed for more than two weeks to
be objectively late within the meaning of the FLSA,” where defendant had defaulted and waived
any opportunity to explain its conduct); Martin v. United States, 117 Fed. Cl. 611, 621 (2014)
(holding that “the government’s payment to employees two weeks later than the Scheduled
Paydays for work performed during the October 2013 budget impasse constituted an FLSA
violation”).10 The Court agrees that two weeks is an appropriate standard to use in assessing
whether Defendants delayed payments to Plaintiffs, especially give the frequency of delayed
payments and the hourly rates involved.
Defendants delayed 50 wage payments between 2010 and 2012. (Pls.’ Br. at 12-12; Dkt.
278-15, 16.) The delays ranged from three days to 17 weeks. (Dkt. 278-42.)
Of these, 21
payments were delayed in excess of two weeks. Accordingly, applying a two-week standard,
Plaintiffs shall recover liquidated damages equal to the minimum wages due to them during the 21
10
Other district courts have held that a FLSA violation can occur when payments are
delayed only a few days. Gaughan v. Rubenstein, 261 F. Supp. 3d 390, 426 (S.D.N.Y. 2017),
order withdrawn, No. 17-2490, 2017 WL 7532583 (2d Cir. Dec. 6, 2017) (holding that “forwarddating,” or delaying, Plaintiff’s paychecks for five days “violates the prompt payment
requirements of the FLSA”, and allowing Plaintiff to add claim of untimely wage payment to
complaint); Gordon v. Maxim Healthcare Servs., Inc., No. CIV.A. 13-7175, 2014 WL 3438007,
at *3 (E.D. Pa. July 15, 2014) (finding that “employer who misses payday by a day or two to be
subject to liability under the statute”).
34
periods of delayed payments.11 Each payment covers two weeks of wages. The minimum wage
for the relevant time period is $7.15. N.Y. Lab. Law § 652. For the periods when the paychecks
were delayed, the gap-time wages and the overtime wages, together with the liquidated damages,
have already been calculated. Plaintiffs are then entitled to liquidated damages for the 70 hours
they worked for each two-week period at the minimum wage rate. Plaintiffs shall recover
liquidated damages for 21 delayed payments, as calculated below:
Number of Late
Payments
Coley
Hall
Johnson
Jones
Richardson
Taylor
Wright
Pope
Total
I.
21
21
21
21
21
21
21
21
Minimum Wage
Two
Weeks’
Hours
$7.15
$7.15
$7.15
$7.15
70
70
70
70
$7.15
$7.15
$7.15
$7.15
70
70
70
70
Liquidated
Damages
$10,510.50
$10,510.50
$10,510.50
$10,510.50
$10,510.50
$10,510.50
$10,510.50
$10,510.50
$84,084.00
Wage Theft Prevention Act Damages
The NYLL provides that the employer shall “furnish each employee with a statement with
every payment of wages,” listing “the number of regular hours worked, and the number of overtime
hours worked.” N.Y. Lab. Law § 195(3) (McKinney’s). “If any employee is not provided a
statement or statements as required by” § 195(3), “he or she shall recover in a civil action damages
Plaintiffs used “the normal cash amount for the identified pay period” in their calculation.
(Pls.’ Br., at 17 n.9.) However, as explained above, the liquidated damages should be calculated
based on the minimum wage.
11
35
of one hundred dollars for each work week that the violations occurred or continue to occur, but
not to exceed a total of twenty-five hundred dollars.”12 N.Y. Lab. Law § 198 (McKinney’s).
Plaintiffs’ wage statements were consistently inaccurate because they were misclassified
as exempt from overtime and were not permitted to record overtime. Defendants violated N.Y.
Lab. Law § 195(3) and owe the maximum statutory damages. This calculation is set forth below:
Time Period
Number of Weeks
Statutory Damages Owed
Coley
11/09/06 - 11/26/12
315
N/A
Hall
11/09/06 - 11/26/12
315
$2,500.00
Johnson
11/09/06 - 11/26/12
315
N/A
Jones
11/09/06 - 11/26/12
315
$2,500.00
Richardson
11/09/06 - 11/26/12
315
$2,500.00
Taylor
11/09/06 - 11/26/12
315
$2,500.00
Wright
11/09/06 - 09/14/12
305
$2,500.00
Pope
11/09/06 - 09/21/12
306
$2,500.00
$15,000.00
Total
J.
Total Damages
The total damages for which Defendants are liable to Plaintiffs are as follows:
Actual
Damages
Liquidated
Damages
Prejudgment
Interest
Liquidated
Damages
for Delayed
Payments
Coley
$20,384.10
$20,384.10
$12,309.96
$10,510.50
N/A
$63,588.66
Hall
$45,342.57
$25,507.65
$24,510.69
$10,510.50
$2,500
$108,371.41
Johnson
$2,933.00
$2,933.00
$1,771.24
$10,510.50
N/A
$18,147.74
12
Statutory
Damages
Individual
Total
This provision was amended on February 27, 2015 to provide damages of $250 for each
week and a maximum total of $5,000. The Court relies on the provision in effect during the
relevant timeframe.
36
Jones
$43,195.98
$28,033.23
$26,086.10
$10,510.50
$2,500
$110,325.81
Richardson
$44,694.26
$24,104.21
$25,978.67
$10,510.50
$2,500
$107,787.64
Taylor
$56,553.55
$33,307.15
$29,674.90
$10,510.50
$2,500
$132,546.10
Wright
$68,499.35
$43,860.95
$36,620.83
$10,510.50
$2,500
$161,991.63
Pope
$101,600.43
$61,502.68
$51,100.47
$10,510.50
$2,500
$227,214.08
Total
$383,203.24
$239,632.97
$208,052.86
$84,084.00
$15,000
$929,973.07
CONCLUSION
For the reasons stated above, the Court grants Plaintiffs’ motion for a default judgment
against Defendant Niles and dismisses Defendants’ counterclaims against Sonya Coley. The Court
previously granted Plaintiffs’ motion for default judgment against Defendants Vannguard, Local,
and the Partnership Corporations. Based, in part, on its prior ruling (Dkt. 220), the Court finds
that Plaintiffs are entitled to recover damages under the FLSA and NYLL against Defendants. The
Court has consolidated the damages inquest as to Defendants and finds that Plaintiffs are entitled
to a total damages amount of $929,973.07, as to which Defendants are jointly and severally liable.
Judgment is GRANTED in Plaintiffs’ favor, and this matter is hereby terminated.
SO ORDERED.
/s/ Pamela K. Chen
Pamela K. Chen
United States District Judge
Dated: March 27, 2018
Brooklyn, New York
37
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