Aguilar et al v. Ham N Eggery Deli Inc. et al
Filing
103
ORDER denying 98 Motion for New Trial; denying 102 Motion for Judgment as a Matter of Law. For the reasons set forth in the attached Memorandum & Order, the court denies defendants' motions for judgment as a matter of law or a new trial, an d grants plaintiffs' 99 motion (which was not correctly docketed as a motion event) for liquidated damages, pre-judgment interest, and attorneys' fees. Specifically, the court orders that plaintiffs are entitled to the following: (1) compensatory minimum wage damages of $4,400 to Aguilar and $4,535 to Torres; (2) compensatory overtime damages of $18,084.38 to Aguilar and $13,843.63 to Torres; (3) liquidated damages of $7,443.13 to Aguilar and $4,594.66 to Torres; and (4) prejudgment interest of $14,873.42 to Aguilar and $16,127.15 to Torres. The parties are directed to meet, confer, and jointly propose a briefing schedule regarding attorneys fees by October 1, 2019. The Clerk of Court is respectfully directed to enter judgment consistent with this order. Ordered by Judge Kiyo A. Matsumoto on 9/5/2019. (Spriggs, Steven)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
--------------------------------------X
ARMANDO AGUILAR and BENITO CRUZ TORRES,
individually and on behalf of all
others similarly situated,
Plaintiffs,
MEMORANDUM AND ORDER
15-CV-2781 (KAM)(SMG)
-againstHAM N EGGERY DELI INC. (d/b/a NEW YORK
DELI) and KOSTAS KALOUDIS,
Defendants.
--------------------------------------X
MATSUMOTO, United States District Judge:
Plaintiffs Armando Aguilar (“Aguilar”) and Benito Cruz
Torres (“Torres”) brought suit against defendants Ham N Eggery
Deli, Inc. and Kostas Kaloudis, alleging violations of the Fair
Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and the
New York Labor Law (“NYLL”), § 190 et seq.
The case proceeded
to trial and was submitted to a jury, which returned a verdict
partially in plaintiff’s favor and partially in defendant’s
favor and awarded plaintiffs damages under the NYLL.
Pending
before the court are defendants’ renewed motion for judgment as
a matter of law and motion for a new trial, and plaintiff’s
motion for liquidated damages, pre-judgment interest, and
attorneys’ fees.
For the reasons set forth below, the court
denies defendants’ motions and grants plaintiffs’ motion.
1
BACKGROUND
On May 13, 2015, plaintiffs commenced this labor law
action for unpaid minimum and overtime wages under the FLSA and
NYLL, unpaid spread of hours pay and violation of wage notice
and statement provisions under the NYLL, and recovery of
equipment costs under the FLSA and NYLL against defendants.
(ECF No. 1, Complaint (“Compl.”).)
On March 30, 2017, the court
issued a Memorandum and Order granting in part and denying in
part plaintiffs’ motion for partial summary judgment.
47, Memorandum & Order dated March 30, 2017.)
(ECF No.
Specifically, the
court: granted Aguilar summary judgment as to defendants’
liability on his tip credit claim; granted Torres summary
judgment as to defendants’ liability on his tip credit claim
insofar as it is based on the prerequisites in N.Y. Comp. Codes
R. & Regs. tit. 12, §§ 1.3 and 2.2 and their predecessors;
granted Aguilar summary judgment on his wage statement claims
under N.Y. Lab. Law §§ 195(3) and 198(1-d) and awarded him
$5,000 in damages; and denied Torres summary judgment on his
wage statement claims.
(Id.)
On October 12, 2018, the court issued a Memorandum and
Order denying in its entirety defendants’ motion for summary
judgment.
2018.)
(ECF No. 64, Memorandum & Order dated October 12,
The court denied summary judgment on defendants’
arguments that the deli was not covered by the FLSA and that
2
Torres’s claims were barred by the statute of limitations,
because there were disputed issues of material facts related to
those determinations.
(Id.)
Based on the denial of summary
judgment on the FLSA coverage issue, the court held that
defendant’s argument that the court should decline to exercise
supplemental jurisdiction over plaintiffs’ NYLL claims was moot.
(Id.)
A trial commenced on November 13, 2018, and a jury
heard evidence on November 13 and 14, 2018.
After hearing
summations and being charged, the jury deliberated and returned
a verdict on November 15, 2018.
Form.)
(ECF No. 97, Returned Verdict
The jury only returned verdicts in plaintiffs’ favor on
the minimum wage and overtime claims under the NYLL, finding for
the defendants on the sole FLSA claim and the other remaining
NYLL claims.
(Id.)
Defendants subsequently filed a renewed
motion for judgment as a matter of law or for a new trial, and
plaintiffs moved for liquidated damages, pre-judgment interest,
and attorneys’ fees.
LEGAL STANDARD
I.
Motion for Judgment as a Matter of Law under Rule 50 or for
a New Trial under Rule 59
“If a party believes that ‘a reasonable jury would not
have a legally sufficient evidentiary basis’ to find for its
adversary on a particular issue, it may move for judgment as a
matter of law during trial under Federal Rule of Civil Procedure
3
50(a) and renew the motion after trial under Rule 50(b).”
Cangemi v. Town of E. Hampton, 374 F. Supp. 3d 227, 232
(E.D.N.Y. 2019) (citing Fed. R. Civ. P. 50 (a)-(b)).
“In ruling
on the renewed motion, the court may: (1) allow judgment on the
verdict, if the jury returned a verdict; (2) order a new trial;
or (3) direct the entry of judgment as a matter of law.”
Fed.
R. Civ. P. 50(b).
“When evaluating a motion under Rule 50, courts are
required to consider the evidence in the light most favorable to
the party against whom the motion was made and to give that
party the benefit of all reasonable inferences that the jury
might have drawn in [its] favor from the evidence.”
ING Glob.
v. United Parcel Serv. Oasis Supply Corp., 757 F.3d 92, 97 (2d
Cir. 2014) (citation and internal quotation marks omitted).
“The court cannot assess the weight of conflicting evidence,
pass on the credibility of the witnesses, or substitute its
judgment for that of the jury, and must disregard all evidence
favorable to the moving party that the jury is not required to
believe.”
Id. (citation and internal quotation marks omitted).
“Put another way, a court may grant a Rule 50 motion only if,
after ‘viewing the evidence in the light most favorable to the
non-movant, [it] concludes that a reasonable juror would have
been compelled to accept the view of the moving party.’”
4
Jackson v. Tellado, 295 F. Supp. 3d 164, 170 (E.D.N.Y. 2018)
(citing Cash v. Cty. Of Erie, 654 F.3d 324, 333 (2d Cir. 2011)).
A party “fil[ing] a renewed motion for judgment as a
matter of law . . . may include an alternative or joint request
for a new trial under Rule 59.”
Fed. R. Civ. P. 50(b).
“The
court may, on motion, grant a new trial on all or some of the
issues . . . after a jury trial, for any reason for which a new
trial has heretofore been granted in an action at law in federal
court[.]”
Fed. R. Civ. P. 59(a).
“In contrast to a Rule 50
motion for a new trial, a Rule 59(a) motion for a new trial “may
be granted even if there is substantial evidence supporting the
jury's verdict.’”
Greenaway v. Cty. of Nassau, 327 F. Supp. 3d
552, 560 (E.D.N.Y. 2018) (citing DLC Mgmt. Corp. v. Town of Hyde
Park, 163 F.3d 124, 134 (2d Cir. 1998)).
“Moreover, a trial
[court] is free to weigh the evidence [itself], and need not
view it in the light most favorable to the verdict winner.”
DLC
Mgmt. Corp., 163 F.3d at 134.
But “[a] trial court should not grant a motion for a
new trial unless it is ‘convinced that the jury ... reached a
seriously erroneous result or that the verdict is a miscarriage
of justice.’”
Ali v. Kipp, 891 F.3d 59, 64 (2d Cir. 2018)
(citing Amato v. City of Saratoga Springs, N.Y., 170 F.3d 311,
314 (2d Cir. 1999)).
“A court considering a Rule 59 motion . .
. should only grant such a motion when the jury’s verdict is
5
egregious . . . and should rarely disturb a jury’s evaluation of
a witness’s credibility.”
DLC Mgmt. Corp., 163 F.3d at 134
(citations and internal quotation marks omitted).
DISCUSSION
I.
Exercise of Supplemental Jurisdiction
Defendants argue that the jury’s verdict should be set
aside because the plaintiffs’ FLSA claims prior to 2015 were
withdrawn before the jury deliberated and, therefore, the court
was divested of its supplemental jurisdiction over plaintiffs’
state law claims from 2009 to 2014.
(ECF No. 102-1, Defendants’
Memorandum of Law in Support of Post-Verdict Motions Pursuant to
Fed. R. Civ. P. 50 & 59 (“Def. Mem.”) at 2, 6.)
Plaintiffs
respond that none of the factors which would allow the court to
decline exercising supplemental jurisdiction are present in this
case and that it would have been appropriate for the court to
exercise jurisdiction even if one of those factors were present.
(ECF No. ECF No. 101, Plaintiffs’ Memorandum of Law in
Opposition to Defendants’ Motion to Set Aside the Verdict of
Grant Defendants a New Trial (“Pl. Opp.”) at 4-7.)
Defendants
argue in reply that the court should not have exercised
supplemental jurisdiction because state law issues predominated
over the case.
(ECF No. 102-2, Defendants’ Reply Memorandum of
Law in Support of Post-Verdict Motions Pursuant to Fed. R. Civ.
P. 50 & 59 (“Def. Reply”) at 2-3.)
6
“Under 28 U.S.C. § 1367(a), federal courts have
supplemental jurisdiction to hear state law claims that are so
related to federal question claims brought in the same action as
to ‘form part of the same case or controversy under Article III
of the United States Constitution.’”
Briarpatch Ltd., L.P. v.
Phoenix Pictures, Inc., 373 F.3d 296, 308 (2d Cir. 2004).
State
and federal claims form part of the same case or controversy if
they “derive from a nucleus of operative fact.”
Id. (citing
Cicio v. Does, 321 F.3d 83, 97 (2d Cir. 2003)).
“It is well
settled that NYLL and FLSA claims that arise out of the same
compensation policies and practices derive from the same common
nucleus of operative fact.”
Salustio v. 106 Columbia Deli
Corp., 264 F. Supp. 3d 540, 551 (S.D.N.Y. 2017).
If the requirement for supplemental jurisdiction under
Section 1367(a) is met, “the discretion to decline supplemental
jurisdiction is available only if founded upon an enumerated
category of subsection 1367(c).”
Itar-Tass Russian News Agency
v. Russian Kurier, Inc., 140 F.3d 442, 448 (2d Cir. 1998).
Under subsection 1367(c), district courts may decline to
exercise supplemental jurisdiction if “(1) the claim raises a
novel or complex issue of State law, (2) the claim substantially
predominates over the claim or claims over which the district
court has original jurisdiction, (3) the district court has
dismissed all claims over which it has original jurisdiction, or
7
(4) in exceptional circumstances, there are other compelling
reasons for declining jurisdiction.”
If one of the § 1367(c)
factors applies, the court still “should not decline to exercise
supplemental jurisdiction unless it also determines that doing
so would not promote the values articulated in Gibbs: economy,
convenience, fairness, and comity.”
Jones v. Ford Motor Credit
Co., 358 F.3d 205, 214 (2d Cir. 2004) (citing United Mine
Workers of America v. Gibbs, 383 U.S. 715, 726 (1966)).
Regarding plaintiffs’ FLSA claims, there was only one
tax return in evidence, for the year 2015, which showed gross
receipts over $500,000, the amount necessary for the FLSA to
apply.
(See Tr. 156.)
When the defense sought directed verdict
under Rule 50, the issue of whether the New York Deli generated
as least $500,000 in revenue was discussed.
(Tr. 233.)
After
the parties discussed the lack of documentation available for
most of the years in question, and after the court noted that
the jury would have to resolve this issue, plaintiff offered to
withdraw the FLSA claims, except for Aguilar’s 2015 FLSA claim,
in order to free the jury from having to decide the issue.
233-35.)
(Tr.
Plaintiffs’ counsel sought confirmation that the court
would continue to exercise supplemental jurisdiction over the
remaining state law claims for both plaintiffs, which the court
agreed to do.
(Tr. 235-36.)
Defense counsel did not raise any
objections to the court’s continued exercise of supplemental
8
jurisdiction.
(See id.)
Defense counsel also did not raise any
objections during the charging conference when plaintiffs’
counsel confirmed that plaintiffs would drop all of the FLSA
claims except for Aguilar’s 2015 claim.
(Tr. 254-55.)
Section 1367(c)(1) does not apply because there are no
novel or complex issues of New York state law at issue here.
Regarding Subsection 1367(c)(2), the state law minimum wage and
overtime claims did not predominate over the federal law claims.
See Shahriar v. Smith & Wollensky Rest. Grp., Inc., 659 F.3d
234, 246 (2d Cir. 2011) (“Because the FLSA and the NYLL use a
similar standard for making [minimum wage or overtime violation]
determination[s], and because each set of claims arise from the
same set of operative facts, a determination as to the FLSA
claims may decide the Plaintiffs' NYLL claim as well.”).
Section 1367(c)(3) does not apply because the court did not
“dismiss[] all claims over which it has original jurisdiction,”
retaining Aguilar’s 2015 FLSA claim.
(emphasis added)).
(28 U.S.C. § 1367(c)(3)
Finally, Section 1367(c)(4) does not apply
because there are no exceptional circumstances at issue in this
case.
But even if the 2015 FLSA claim had been dismissed as
well, the Second Circuit has “upheld the exercise of
supplemental jurisdiction even when all federal-law claims were
eliminated prior to trial, for example, in long-pending cases
9
presenting no novel issues of state law where discovery had been
completed, dispositive motions had been submitted, and the case
would soon be ready for trial.”
Catzin v. Thank You & Good Luck
Corp., 899 F.3d 77, 83 (2d Cir. 2018) (citation and internal
quotation marks omitted).
See also Purgess v. Sharrock, 33 F.3d
134, 139 (2d Cir. 1994) (“When the district court determined, at
the end of the defendants' case, to dismiss plaintiff's last
federal claim, there were no compelling reasons at that point to
prevent a final determination of the state claims by the jury. .
. . The district court did not abuse its discretion by
exercising supplemental jurisdiction.”).
Moreover, even accepting for the sake of argument that
the state law claims predominated after the parties stipulated
to withdraw the majority of the FLSA claims, defendant does not
adequately establish that judicial economy, convenience,
fairness, and comity would be served by declining to exercise
supplemental jurisdiction.
“[E]ven when federal claims are
resolved before trial, comity does not automatically mandate
dismissal of pendent state claims.”
Enercomp, Inc. v. McCorhill
Pub., Inc., 873 F.2d 536, 545 (2d Cir. 1989).
Here, a federal
claim remained at issue during part of the trial.
Judicial
economy would not be served by having the NYLL claims retried in
state court with the same evidence presented in federal court.
It would have been unfair for the plaintiffs’ case to be dropped
10
during trial, and it would be unfair now for the plaintiffs to
try a duplicative case arising from the same facts in state
court.
It also would be imprudent for the court to entertain
and grant the defendants’ current objection after defense
counsel failed to object when plaintiff’s counsel specifically
confirmed that the court would exercise supplemental
jurisdiction over the state law claims.
The court’s exercise of supplemental jurisdiction over
the state law claims was proper, and the court will not set
aside the jury’s verdict on this basis.
II.
Evidentiary Support for Jury Award
A. Armando Aguilar
Defendants argue that the jury’s verdict should be
overturned and its damages award set aside because there was
overwhelming evidence that Aguilar was properly paid in
accordance with minimum wage and overtime provisions.
102-1, Def. Mem. at 3.)
(ECF No.
Defendants specifically claim that
Aguilar’s pay reflected the rates that were listed on a sign
provided by the New York Department of Labor, which was posted
on the wall of the business and reflected the minimum wage
changes over time.
(Id. at 3-4.)
The defendants also identify
testimony from Aguilar and another witness, Willy Quinones,
asserting that plaintiffs were aware of the sign.
11
(Id. at 3-4.)
Plaintiffs argue that defendants failed to articulate
how or why the damages award was unsupported by the evidence and
counter defendants’ arguments by contending that defendants’
application of the tip credit entitled Aguilar to some amount of
damages.
(ECF No. 101, Pl. Opp. at 8.)
In support of their
damages awards, plaintiffs point to Aguilar’s testimony that he
frequently worked more than 40 hours a week and was paid a fixed
salary, which resulted in damages (an award reflecting that the
jury only partially credited Aguilar). (Id. at 8-9.)
In reply, defendants again identify the signs
identifying the lawful pay rates as evidence supporting their
position.
(ECF No. 102-2 at 3.)
Defendants also argue that
defendant Kaloudis’s testimony regarding his process of
calculating and making payments to Aguilar supports overturning
the verdict, in addition to drawing attention to offered
evidence that Aguilar spent part of his time doing “delivery
(i.e. tip credit) work.”
(Id. at 4-5.)
Considering the evidence in the light most favorable
to Aguilar, a reasonable jury would not have been compelled to
find in defendants’ favor.
Even weighing the evidence under
Rule 59, the court does not find that the jury reached an
egregious or seriously erroneous result.
As described in
greater detail below, Aguilar offered testimony that he
regularly worked over 40 hours a week and was paid a fixed
12
weekly salary that did not sufficiently cover the minimum wage
and overtime pay.
The jury credited Aguilar’s testimony over
that of defendant Kaloudis and witness Willy Quinones.
The
presence of a sign reflecting the law is not evidence that
Aguilar was paid in accordance with that law.
Aguilar testified that he started working at the deli
as a dishwasher, cleaner, and delivery person.
(Tr. 31-32.)
He
testified that he worked from 7 a.m. to 6:30 p.m. on weekdays
and from 6 a.m. to 2 p.m. on Saturdays.
(Tr. 31.)
Aguilar
would make 5-7 deliveries, in contrast to other people who made
a lot more deliveries.
(Tr. 37, 84.)
In July 2011, his
schedule changed to working from 5 a.m. to 4 p.m. on weekdays,
and from 5 a.m. to 1 p.m. on Saturdays.
became a food preparer in July 2011.
(Tr. 33.)
(Tr. 33.)
He also
In July 2013,
his weekday schedule changed to working form 5 a.m. to 3 p.m.
(Tr. 34.)
Aguilar testified that he was paid $250 per week when
he started working for the defendants in 2008, and received a
raise to $400 per week in July 2011, when he became a food
preparer.
(Tr. 34-35.)
He testified that he was sometimes
given around $1 to $1.50 per delivery (or $10 in total) in tips
when he made deliveries.
(Tr. 85.)
$460 per week in April 2013.
His pay increased again to
(Tr. 36.)
Aguilar testified that
Kaloudis never sat down with him and showed him how his pay was
13
being calculated, and he also testified that he was told by
Kaloudis that he would be paid at a weekly rate.
(Tr. 36-37,
87.)
Kaloudis testified that the deli’s hours of operations
were from 5 a.m. to 4 p.m. Monday through Friday, and 6 a.m. to
1 p.m. on Saturdays.
(Tr. 94.)
He testified that the employees
had a steady schedule and set hours.
(Tr. 95.)
Kaloudis
testified that the schedule was never written because there were
set hours and the schedule never fluctuated.
(Tr. 97.)
But he
also stated that the schedules, including Mr. Aguilar’s, varied
seasonally—during the summer and around Christmas.
(Tr. 97-98.)
Kaloudis admitted that he did not understand that there was a
legal requirement to keep records of the hours worked and noted
that the laws changed constantly between 2008 and 2015.
104.)
(Tr.
Kaloudis stated that he did not keep records of when
people clocked in or out of work, but kept index cards that
reflected the hours an employee worked that week.
(Tr. 105.)
Defendants offered an exhibit, Def. Ex. 5, which
consisted of index cards Kaloudis said he used to record
Aguilar’s pay from November 2012 through March 29, 2015.
167.)
Sandy.
(Tr.
He claimed that his prior records were lost in Hurricane
(Tr. 167.)
Kaloudis described his payment calculation
as multiplying the minimum wage by the hours worked in the week,
adding overtime, and deducting tip credit.
14
(Tr. 166.)
The
cards reflected consistent application of tip credit, which was
always $2.25 per hour and deducted from the minimum wage.
170, 174.)
(Tr.
Kaloudis testified that Aguilar worked 25 hours per
week doing delivery work.
(Tr. 170-72.)
Defendants deducted a
tip credit of $56.25 from Aguilar’s weekly pay.
(Tr. 46; Def.
Ex. 5 at 1, 4.)
Kaloudis further testified that he believed Aguilar
was paid around $250 or $270 per week when Aguilar first started
working and claimed that Aguilar’s pay changed every time the
minimum wage increased.
(Tr. 109, 195-96.)
Kaloudis also
testified that he thought Aguilar generally received between
$40-$50 in tips each day.
(Tr. 197.)
Kaloudis said Aguilar
would ask him to exchange the $1 bills received as tips for
larger bills.
(Id.)
Aguilar denied that he made $40-$50 a day
in tips (Tr. 84) and claimed that he would bring his tip money
to Kaloudis only when he needed change for a dollar.
(Tr. 85-
86.)
Kaloudis testified that he did not give employees,
like Aguilar, who were paid in cash pay statements; he would
give them the receipt from the calculator he used to calculate
their pay with them each week.
(Tr. 100.)
Kaloudis said that
he calculated the payments in the presence of and with any
necessary input from the employee.
(Tr. 100, 106-08.)
He
testified that workers knew what the minimum wage was because of
15
posters he had on the business’s wall.
(Tr. 161.)
He posted
these posters from the restaurant’s opening and changed them
whenever a new one was issued.
(Tr. 161-62.)
Willy Quinones, an employee of the deli from 2014
through 2016, testified that he saw Aguilar speaking with
Kaloudis with index cards and calculators when Aguilar was
getting paid.
(Tr. 244.)
He also testified that he did not
hear any of their conversations or see any of the calculations
being made.
(Tr. 247-48.)
Viewing the evidence in the light most favorable to
the plaintiff, the court finds that the jury would not have been
compelled to rule in favor of the defendants.
Nor can the court
conclude that the jury’s verdict was seriously erroneous or a
miscarriage of justice.
The jury’s finding of minimum wage
violations is consistent with the testimony offered by both
Aguilar and Kaloudis that Aguilar was paid $250 per week when he
first started working at the deli, as well as defendant’s
testimony that he consistently deducted a tip credit from
Kaloudis’s minimum wage.
Defendants also argue that Def. Ex. 5 demonstrates
that Aguilar was paid in accordance with the minimum wage and
overtime.
5.)
(ECF No. 102-1, Mem. at 4; ECF No. 102-2, Reply at 4-
However, the jury was at liberty to determine whether they
credited this record as comprehensive and accurate regarding how
16
much Aguilar worked or was paid.
Kaloudis himself testified
that he did not keep track of the actual times people started
and finished working, claiming that the schedules were set.
Aguilar also testified that there was not a system for clocking
the employees’ time.
And Kaloudis further testified that he
came into work after the business opened, varying the time he
arrived “to keep everybody on edge.”
(Tr. 94-95.)
This meant
he did not personally observe or have firsthand knowledge of how
much Aguilar actually worked each week.
The jury weighed both
parties’ testimony and credited what they believed.
Defendants also argue that they properly paid Aguilar
at the tip credit rate and that the record supports this.
No. 102-2, Reply at 4-5.)
(ECF
This court already determined that
defendants were not entitled to deduct a tip credit from the
wages paid to Aguilar during the first round of summary judgment
briefing.
at 8-9.)
(ECF No. 47, Memorandum & Order dated March 30, 2017
The jury was properly instructed that the defendants
were not entitled to take a tip credit.
Even considering
defendants’ trial testimony and post-trial arguments, defendants
still would not prevail on the tip credit issue.
They did not
offer evidence establishing that defendants complied with the
written notice requirements to claim tip credit under the NYLL
or that Aguilar was classified as an employee against whom a tip
17
credit could be applied, the bases on which the court ruled in
Aguilar’s favor on summary judgment.
Based on the foregoing, the court will not set aside
the jury’s verdict as to Aguilar, and defendants’ motions are
denied.
B. Benito Cruz Torres
Defendants argue that the jury’s verdict and award of
damages to Torres should be set aside because Torres was aware
of the lawful wage rates and provided vague testimony.
Mem. at 5-6; Def. Reply at 6-7.)
(Def.
Defendants assert that Torres
was paid in cash at his request and that Kaloudis maintained
payment records for Torres which were destroyed in Hurricane
Sandy.
(Def. Mem. at 5; Def. Reply at 6-7.)
Plaintiffs argue
that defendants do not identify how or why the damages award to
Torres was unsupported by the evidence and that Torres also was
entitled to damages based on defendants’ application of tip
credit to his wages.
Kaloudis testified that he thought that Torres worked
from 7 a.m. to 4 p.m. on Monday through Friday, though he also
began working on Saturdays from 6 a.m. to 1 p.m., four or five
months after he started.
Torres was paid $250.
(Tr. 110.)
(Tr. 111.)
Kaloudis testified that
The payment records regarding
Torres were lost in Hurricane Sandy.
(Tr. 182.)
Kaloudis
testified that he fired Torres because he saw him with bananas
18
that he had taken without permission from the restaurant.
(Tr.
164.)
Torres testified that he worked at the New York deli
from 2008 to 2012.
(Tr. 214-15.)
He said that he remembers he
stopped working for the defendants in 2012, because he
remembered that he worked with his coworkers for 4 years.
225-26.)
(Tr.
He said he worked from 7 a.m. to 5 p.m. Monday through
Friday, and from 6:00 a.m. to 1:00 p.m. on Saturday, washing
dishes and making deliveries.
(Tr. 215.)
He testified that
there was no time recording system for tracking their hours.
(Tr. 216.)
Torres testified that his initial pay was $175 per
week, which increased to $225 a week a year into his employment,
and that he made $250 per week during his last year working
there when he began cleaning and stocking merchandise.
216.)
(Tr.
Torres said that he wasn’t aware of the minimum wage rate
(Tr. 219), but later conceded that he saw the poster listing the
minimum wage as $7.25.
(Tr. 223.)
The jury considered the conflicting testimony and
credited Torres’s claim that he was not paid properly during his
time working for the defendants.
This case does not present a
rare circumstance in which the court should undermine the jury’s
assessment of a witness’s credibility.
In any case, the jury
did not fully credit Torres, ultimately agreeing with the
defense’s position that Torres was terminated in 2010, rather
19
than in 2012 as plaintiffs contended.
Viewing the evidence in
the light most favorable to the plaintiff, the court finds that
the jury would not have been compelled to rule in favor of the
defendants.
The court also cannot conclude that the jury’s
verdict is seriously erroneous or constitutes a miscarriage of
justice.
The court will not aside the jury’s verdict as to
Torres, and defendants’ motions are denied.
III.
Award of Additional Damages and Fees to Plaintiffs
A. Minimum Wages and Overtime
Plaintiffs seek liquidated damages and prejudgment
interest based on the jury’s award of compensatory minimum wage
and overtime damages.
Before calculating liquidated damages and
prejudgment interest, the court has determined that some
adjustments are warranted as a matter of law to determine the
proper compensatory damages.
The start date for the damages
period is May 13, 2009 because the plaintiffs may only recover
six years prior to filing of the action.
N.Y. Lab. Law § 663.
1. Aguilar
To determine the minimum wage to which Aguilar was
entitled, the jury used two methods to calculate damages. 1
1 Although the verdict form did not include the jury’s specific calculations,
the court determined their calculations by applying the jury instructions and
confirming which salary amounts yielded the awarded damages. The court
continues to accept the jury’s factual findings, as explained above, with
20
First, the jury credited Aguilar’s testimony regarding his
weekly salary and awarded him the difference between what the
labor law required and what he was paid.
After Aguilar’s salary
was increased in July 2011, the jury used a second method of
calculating damages and credited Kaloudis’s testimony that he
deducted tip credit from Aguilar’s pay.
The jury awarded
Aguilar damages equal to the amount of tip credit that Kaloudis
wrongfully deducted, likely relying on the instruction that the
court had already determined that the law did not authorize
defendants to deduct a tip credit.
For Aguilar’s 2009 damages, the jury awarded 23 weeks
of pay for the two applicable minimum wage rates that year.
However, Aguilar can only recover for damages six years prior to
the filing of this action, or as far back as May 13, 2009.
The
minimum hourly wage changed from $7.15 to $7.25 on July 24,
2009.
The jury, therefore, was limited to providing 10 weeks of
damages at the $7.15 hourly minimum wage, covering the period
from May 13 to July 24, 2009, rather than the 23 weeks they
used.
Beginning in July 2011, when the jury began awarding
tip credit, the jury recognized that Aguilar’s weekly pay was
greater than the minimum wage required by law.
Whatever
alterations to damages made only where the calculations failed to comply with
the law.
21
defendants’ intent regarding the tip credit, Aguilar’s weekly
salary from July 2011 through April 2015 exceeded the minimum
wage based on a forty-hour work week, and Aguilar, therefore,
cannot recover an additional minimum wage award for this time
period.
The court adjusts Aguilar’s overall minimum wage
awards as follows:
Year
Lawful
Weekly
Weekly
Weeks
Original
Corrected
Weekly
Wage
Shortfall
Underpaid
Jury Award
Award
Wage
Received
2009
$286
$250
$36
10
$1748
$360
2009 2
$290
$250
$40
23
2010
$290
$250
$40
52
$2080
$2080
2011
$290
$250
$40
26
$2503
$1040
Total
$920
$15,950 3 $4400
The jury also awarded Aguilar overtime damages for the
years 2009, 2010, and 2011 for 15 hours of overtime per week.
Again, the jury awarded overtime pay for the year 2009 beyond
the statute of limitations.
The court reduces Aguilar’s
2 Damages for the year 2009 are apportioned to reflect the two different
minimum wage rate periods applicable that year: 10 weeks at $7.15 and 23
weeks at $7.25.
3 The jury also awarded damages from July 2011 through April 2015 (see ECF No.
97, Returned Verdict Form at 3-4), which are reflected in this total.
22
overtime award to reflect that Aguilar cannot recover for
overtime prior to May 13, 2009:
Year
Overtime Rate
Hours of
Weeks
Original
Corrected
Overtime Worked
Underpaid
Jury Award
Award
$7452
$1608.75
2009
$10.725
15
10
2009
$10.875
15
23
2010
$10.875
15
52
$8483
$8482.5
2011
$10.875
15
26
$4242
$4241.25
$20177
$18084.38
$3751.88
Total
2. Torres
Regarding Torres, the jury also awarded damages that
did not reflect the May 13, 2009 limitations period for damages
in the year 2009.
For Torres’s minimum wage damages, the jury
credited Torres’s testimony that his salary was $175 per week
and then $225 per week, before increasing to $250 per week
during his last year of employment.
Although the court alters
the award to reflect the statute of limitations, the court does
not otherwise alter the jury’s findings.
Torres’s minimum wage
awards, as adjusted for the statute of limitations, are as
follows:
23
Year
Lawful
Weekly
Weekly
Weeks
Original
Corrected
Weekly
Wage
Shortfall
Underpaid
Jury Award
Award
Wage
Received
2009 4
$286
$175
$111
7
$4576
$777
2009
$286
$225
$61
3
$183
2009
$290
$225
$65
23
$1495
2010
$290
$250
$40
52
$2080
$6656
Total
$2080
$4535
Similarly, the jury awarded Torres overtime damages
for the year 2009 that did not reflect the May 13, 2009
limitations period.
Torres’s overtime awards as adjusted are as
follows:
Year
Overtime Rate
Hours of
Weeks
Original Jury
Corrected
Overtime Worked
Underpaid
Award
Award
$8424
$1608.75
2009
$10.725
15
10
2009
$10.875
15
23
2010
$10.875
15
52
$3751.88
$8482.5
$16907
Total
$8483
$13843.63
4 The year 2009 is split into three sections to reflect the two minimum wage
rate periods applicable in 2009, the statute of limitations, and the jury’s
crediting of Torres’s testimony that he was initially paid $175 and then
$225. The jury’s initial damages award reflected a finding that Torres was
paid at each of these rates for half of the year (26 weeks).
24
Having made the foregoing adjustments, the court now
turns to the plaintiffs’ requests for liquidated damages and
prejudgment interest.
B. Liquidated Damages
Plaintiffs argue that they are entitled to liquidated
damages pursuant to New York Labor Law § 198, based on the
jury’s findings that defendants acted willfully prior to
November 24, 2009, and did not act in good faith after November
24, 2009.
(ECF No. 99, Plaintiffs’ Post-Trial Memorandum of Law
(“Pl. Mem.”) at 2.)
Plaintiffs note that the jury could have
made their willfulness and good faith determinations based on
the magnitude of underpayments plaintiffs experienced, as well
as the defendants’ awareness of and ongoing failures to
demonstrate their attempts to comply with the NYLL.
(Pl. opp.
at 9-10.)
Defendants argue that no liquidated damages should be
awarded because the jury’s findings on willfulness and good
faith were not supported by the weight of the evidence.
(ECF
No. 100, Defendants’ Memorandum of Law in Opposition to
Plaintiffs’ Post-Verdict Memorandum of Law re Liquidated Damages
and Prejudgment Interest (“Def. Opp.”) at 1.)
Defendants also
argue that the jury’s completed verdict form is vague as to when
the jury’s findings applied.
(Id. at 2.)
Defendants argue
generally that the plaintiffs were properly paid, which is
25
reflected in the records presented during the trial or lost
during Hurricane Sandy, and that plaintiffs knew they were
getting paid properly based on the signs in the business and
Kaloudis’s review of their payments with them each week.
Mem. at 6-7; Def. Reply at 7-8.)
(Def.
Defendants assert that to the
extent there were any violations of the labor law, any
underpayments were “completely inadvertent, and not ‘willful’ or
made subjectively in bad faith.”
(Def. Opp. at 2.)
“[W]illfulness . . . involves either knowledge by the
employer that his conduct is illegal or reckless disregard for
whether it is statutorily prohibited.”
Yu G. Ke v. Saigon
Grill, Inc., 595 F. Supp. 2d 240, 261 (S.D.N.Y. 2008).
“No
finding of malice or bad faith, however, is necessary.”
Ayres
v. 127 Rest. Corp., 12 F. Supp. 2d 305, 309 (S.D.N.Y. 1998).
But “[m]ere negligence is insufficient . . . and the burden is
on the employee to show willfulness.”
Young v. Cooper Cameron
Corp., 586 F.3d 201, 207 (2d Cir. 2009).
“[I]f an employer acts
unreasonably, but not recklessly, in determining its legal
obligation, its action should not be considered willful.”
Parada v. Banco Indus. De Venezuela, C.A., 753 F.3d 62, 71 (2d
Cir. 2014).
“The applicable test for willfulness [under New
York Labor Law] appears to parallel that employed in determining
willfulness for limitations purposes under the FLSA.”
595 F. Supp. 2d at 261.
Yu G. Ke,
“Where a jury has returned a finding
26
of willful violations of the FLSA, courts typically do not
exercise their discretion to reduce an award of liquidated
damages under the FLSA.”
Gortat v. Capala Bros., 949 F. Supp.
2d 374, 380 (E.D.N.Y. 2013).
“In 2009, the NYLL was amended to mandate an award of
liquidated damages ‘unless the employer could prove its good
faith,’ mirroring the FLSA's liquidated damages provision.”
Rojas v. Splendor Landscape Designs Ltd., 268 F. Supp. 3d 405,
411–12 (E.D.N.Y. 2017) (citing Chowdhury v. Hamza Express Food
Corp., 666 F. App’x. 59, 60 (2d Cir. 2016)).
“To establish the
requisite subjective good faith, an employer must show that it
took active steps to ascertain the dictates of the FLSA and then
act[ed] to comply with them.”
Barfield v. New York City Health
& Hosps. Corp., 537 F.3d 132, 150 (2d Cir. 2008) (citation and
internal quotation marks omitted).
The jury credited the plaintiffs’ testimony regarding
what they were paid and determined that the defendants failed to
pay the plaintiffs the minimum wage for a full work week for at
least some of the time during which the defendants employed the
plaintiffs.
Plaintiffs elicited testimony from Kaloudis that he
had primary responsibility for determining employee pay.
103-04.)
(Tr.
When asked whether he understood one of the legal
requirements he was bound by, Kaloudis testified that he did not
and that “through 2008 to 2015 the laws constantly changed.”
27
(Tr. 104.)
Defendants, however, have also claimed that the
business had a poster listing the correct minimum wage amount to
which employees were entitled and other labor law requirements.
(Tr. 222-23; Def. Reply at 6-7.)
Whether considering Kaloudis’s
awareness of the “constantly chang[ing]” labor laws or his
understanding of the minimum wage from the posters in his
business, the jury had a sufficient basis to determine that the
defendants were aware of or acted with reckless disregard for
whether their conduct violated New York Labor Law, and that the
defendants failed to ascertain and/or comply with the same.
See
Vasquez v. Ranieri Cheese Corp., No. 07-CV-464, 2010 WL 1223606,
at *18 (E.D.N.Y. Mar. 26, 2010) (“The thrust of the defense,
inferentially, is that [the employer] somehow had a good faith
reason not to read and implement the laws his poster-hanging
noticed.”).
Moreover, the jury determined that the defendants
acted in subjective good faith beginning in July 2011,
acknowledging that the defendants paid Aguilar a higher salary
that sufficiently covered the minimum wage.
Although the jury
credited the defendants as acting in good faith, starting in
July 2011 when Aguilar’s total salary increased, the jury
nonetheless determined defendants remained liable because the
defendants improperly reduced the plaintiffs’ wages by deducting
a tip credit, without properly complying with the tip credit
28
law’s prerequisites or even determining whether plaintiffs were
employees to whom a tip credit could be applied.
In essence,
the jury appears to have found that defendants attempted to
comply with the minimum wage law, even though they improperly
considered tip credit as compensation.
Defendants argue that the liquidated damages
calculations are faulty because the jury’s verdict does not
specify the time period, and contest plaintiff’s “propos[al] to
presume that the jury found that violations prior to November
24, 2009 were willful” based on the jury instructions.
Opp. at 2.)
(Def.
Defendants also argue that there is “a vagueness
and ambiguity” in a handwritten note on the verdict sheet
stating “[e]verything before July 2011 [was] not in good faith,”
and that the jury has not sufficiently identified the time
period applicable for this finding.
The court respectfully disagrees with both of these
defense arguments.
The jury instructions explained the relevant
time periods to which the jury’s findings would apply:
“violations that occurred before November 24, 2009” for
willfulness and “on or after November 24, 2009” for good faith.
(ECF No. 78, Court Ex. 3 – Jury Instructions at 40-41.)
Additionally, the handwritten note on the verdict form clarifies
that the good faith determination by the jury applied from the
start of the period, November 24, 2009, to July 2011, which is
29
when Aguilar received an increased salary.
Although the court
believes the jury instructions on willfulness are adequate to
determine the relevant time period for the willfulness finding,
the jury’s handwritten clarification regarding good faith
inferentially supports the conclusion that the jury found all of
defendants’ violations prior to November 24, 2009 to be willful.
The court will not overturn the jury’s findings on willfulness
and good faith, and plaintiffs are entitled to liquidated
damages as follows:
Aguilar’s Liquidated Damages
Year
Minimum
Liq. Dam.
Min. Wage
Overtime
Liq. Dam.
Overtime
Wage
Percentage
Liq.
Wage Damages
Percentage
Liq.
Damages
Damages
Damages
2009
$1280
25%
$320
$5360.63
25%
$1340.16
2010
$2080
25%
$520
$8482.5
25%
$2120.63
2011 5
$561.6
25%
$140.4
$2290.28
25%
$572.57
2011
$478.4
100%
$478.4
$1951.32
100%
$1950.98
$1458.8
$18084.38
Total $4400
$5984.33
2011 is split into two time periods because the liquidated damages provision
of New York Labor Law § 198 increased from 25% to 100% beginning April 9,
2011. The jury awarded Aguilar damages in 2011 from the start of the year
until his salary increased beginning in July 2011. The court apportioned
Aguilar’s 2011 damages award into 54%, reflecting the percentage of time from
January 1, 2011 through April 8, 2011, and 46%, reflecting the percentage of
time from April 9, 2011 through June 30, 2011. The court then awarded
liquidated damages based on the percentage applicable to each time period.
5
30
Torres’s Liquidated Damages
Year
Minimum
Liq. Dam.
Min. Wage
Overtime
Liq. Dam.
Overtime
Wage
Percentage
Liq.
Wage Damages
Percentage
Liq.
Damages
Damages
Damages
2009
$2455
25%
$613.75
$5360.63
25%
$1340.16
2010
$2080
25%
$520
$8483
25%
$2120.75
Total $4535
$1133.75 $13843.63
$3460.91
C. Prejudgment Interest
“Where . . . damages were incurred at various times,
interest shall be computed upon each item from the date it was
incurred or upon all of the damages from a single reasonable
intermediate date.”
N.Y. C.P.L.R. § 5001(b).
See also Conway
v. Icahn & Co., 16 F.3d 504, 512 (2d Cir. 1994) (“[W]here
damages are incurred at various times after the cause of action
accrues, [N.Y. C.P.L.R.] section 5001 grants courts wide
discretion in determining a reasonable date from which to award
pre-judgment interest.”).
“[T]he midway point between when
‘plaintiffs began and ceased working for defendant[s]’ [is] a
‘reasonable intermediate date’ for purposes of calculating
prejudgment interest.”
Santillan v. Henao, 822 F. Supp. 2d 284,
298 (E.D.N.Y. 2011) (citing Pavia v. Around the Clock Grocery,
Inc., No. 03-CV-6465, 2005 WL 4655383, at *8 (E.D.N.Y. Nov. 15,
2005)).
31
“Pre-judgment interest and liquidated damages under
the Labor Law are not functional equivalents . . . [and] serve
fundamentally different purposes.”
Reilly v. Natwest Markets
Grp. Inc., 181 F.3d 253, 265 (2d Cir. 1999).
“Prejudgment interest is calculated [ ] on the unpaid wages due
under the NYLL, not on the liquidated damages awarded under the
state law.”
Fermin v. Las Delicias Peruanas Rest., Inc., 93 F.
Supp. 3d 19, 49 (E.D.N.Y. 2015) (citations omitted).
“Simple prejudgment interest is calculated by
multiplying the principal by the interest rate by the time
period-from a singular, midpoint date-up until and including the
date judgment is entered.”
Maldonado v. La Nueva Rampa, Inc.,
No. 10-CV-8195, 2012 WL 1669341, at *11 (S.D.N.Y. May 14, 2012).
The statutory rate of interest in New York is nine percent per
year.
N.Y. C.P.L.R. § 5004.
Here, the principal is the amount of compensatory
damages, which is multiplied by 9% and by the number of years
from the midpoint date through the date judgment is entered.
The midpoint date for Aguilar, based on his employment dates, is
May 1, 2012.
The court exercises its discretion and adopts
plaintiffs’ proposed midpoint date of December 6, 2009 for
Torres.
The prejudgment interest for the plaintiffs is as
follows:
32
Plaintiff
Compensatory
Interest Rate
Prejudgment
September 6, 2019
Damages
Years through
Interest Owed
Judgment
Aguilar
$22484.38
9%
7.35
$14873.42
Torres
$18378.63
9%
9.75
$16127.25
D. Post-Judgment Increase
Pursuant to N.Y. Lab. Law § 198(4), “if any amounts
remain unpaid upon the expiration of ninety days following
issuance of judgment, or ninety days after expiration of the
time to appeal and no appeal is then pending, whichever is
later, the total amount of judgment shall automatically increase
by fifteen percent.”
Plaintiffs are entitled to an increase
consistent with Section 198(4) if the statutory conditions are
met.
E. Attorneys’ Fees
The parties are directed to confer and file a proposed
briefing schedule regarding plaintiffs’ application for
attorney’s fees.
33
CONCLUSION
For the foregoing reasons, the court denies
defendants’ motions for judgment as a matter of law, or a new
trial, and grants plaintiffs’ motion for liquidated damages,
pre-judgment interest, and attorneys’ fees.
Specifically, the
court orders that plaintiffs are entitled to the following:
•
(1) compensatory minimum wage damages of $4,400
to Aguilar and $4,535 to Torres;
•
(2) compensatory overtime damages of $18,084.38
to Aguilar and $13,843.63 to Torres;
•
(3) liquidated damages of $7,443.13 to Aguilar
and $4,594.66 to Torres; and
•
(4) prejudgment interest of $14,873.42 to Aguilar
and $16,127.15 to Torres.
The parties are directed to meet, confer, and jointly
propose a briefing schedule regarding attorneys’ fees by October
1, 2019.
The Clerk of Court is respectfully directed to enter
judgment consistent with this order.
SO ORDERED.
Dated:
September 5, 2019
Brooklyn, New York
_________/s/_________________
HON. KIYO A. MATSUMOTO
United States District Judge
Eastern District of New York
34
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