Pena Bustamante v. Uno Cafe & Billiards Inc. et al
Filing
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FINDINGS OF FACT AND CONCLUSIONS OF LAW: Pena is awarded damages of $147,095.33, consisting of the following amounts: $10,000 for his wage notice and wage statement claims; compensatory damages of $57,545.36 plus prejudgment interest of $30,492.73 (9% per year since July 5, 2012); and liquidated damages of $49,057.24. Pena is further entitled to costs and reasonable attorneys fees. Ordered by Judge Frederic Block on 5/23/2018. (Innelli, Michael)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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JUAN CARLOS PENA BUSTAMENTE,
individually and on behalf of others FINDINGS OF FACT
similarly situated,
CONCLUSIONS OF LAW
1:15-cv-04192-FB-RML
Plaintiff,
AND
-againstUNO CAFÉ & BILLIARDS INC. doing
business as Uno Café & Billiards, NY
CANTAOKE INC. doing business as Amor
Karaoke & Bar, and YANGKEY KIM,
Defendants.
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Appearances:
For the Plaintiff:
JESSE S. BARTON
MICHAEL A. FAILLACE
Michael Faillace & Associates, PC
60 East 42nd Street, Suite 2020
New York, NY 10165
For the Defendants:
GREGORY NICHOLAS FILOSA
ARIEL YIGAL GRAFF
Filosa Graff LLP
111 John Street, Suite 2510
New York, NY 10038
BLOCK, Senior District Judge:
Plaintiff Juan Carlos Pena Bustamente (“Pena”) sued Defendants Uno Café &
Billiards Inc., d/b/a Uno Café & Billiards (“Uno”); NY Cantaoke Inc., d/b/a Amor
Karaoke & Bar (“Amor”); and Yangkey Kim (“Kim”) under the federal Fair Labor
Standards Act (“FLSA”) and the New York Labor Law (“NYLL”) claiming unpaid
overtime, a violation of wage notice and statement requirements, and a spread-ofhours violation. The Court held a bench trial on March 20, 2018. Based on the
following combined findings of fact and conclusions of law pursuant to Federal Rule
of Civil Procedure 52, the Court finds Defendants not liable on the spread of hours
claim and liable on the remaining claims in the amount of $147,095.33, including
prejudgment interest. 1
Defendants Uno and Amor are located on separate levels of a building in the
Jackson Heights neighborhood of Queens, New York. Amor is on the first floor, and
Uno the second floor. Defendant Kim was one of the owners of Uno and Amor. He
managed both businesses and made personnel decisions, including hiring and firing
of employees, payment of wages, and management and supervision of all employees.
Pena worked for Uno and Amor from sometime in 2005 until June 27, 2015 as
a security guard and, later, as a manager of several slot machines. Defendants never
provided Pena with notice regarding wages, compensation, or any related matter.
Defendants never provided Pena with any statement regarding hours worked,
overtime hours, or wages earned.
From June 2009 to July 2010, Pena worked as a security guard from
approximately 10:00 p.m. to 5:00 a.m., six days per week, for a total of 42 hours per
week. 2 During that time, he was paid $600 weekly. From July 2010 to December
Pena also asserted a claim to recover equipment costs but produced no evidence in support of
that claim at trial. The Court therefore dismisses the claim.
1
Defendants attempted to contradict Pena’s testimony regarding his hours during this period with
testimony that Uno and Amor closed at 4:00 a.m. and that another security guard never worked
2
2
2013, he continued to work as a security guard, but his schedule and hours changed.
At that time, he worked seven days per week from 10:00 p.m. to 5:00 a.m., for a
weekly total of 49 hours, and was paid $700 each week.3
Sometime before 2014, Kim leased several slot machines from a third party and
installed them in Uno Café for the use and entertainment of patrons. Until January
2014, a cashier, non-party Hyeong Gyoo Jang, oversaw the machines and made cash
payments to customers who won. In January 2014, Jang was arrested for operating
the slot machines, and Pena began managing them instead, with a corresponding
increase in hours and pay. For the first four weeks, he worked daily from 4:00 p.m.
to 4:00 a.m., earning $1,050 per week for a total of 84 hours worked. After the first
four weeks, he worked 8:00 p.m. to 2:00 a.m. daily, earning $1,050 per week for 42
hours of work.4 He maintained that schedule until he was dismissed on June 27,
2015.
past 4:00 a.m. This testimony was insufficient to rebut Pena’s testimony. Even if the businesses
closed to the public at 4:00 a.m., it is reasonable to infer that employees, including Pena, would
remain for some time thereafter to clean and perform other tasks. That another security guard
worked different hours proves nothing about Pena’s hours.
Although Pena testified that he began managing the slot machines in December 2012, the Court
credits testimony that a cashier managed the slot machines until the cashier was arrested for it in
January 2014.
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Pena testified that he worked from 4:00 p.m. to 4:00 a.m. every day without exception.
However, the Court finds that his actual hours were reduced based on credible testimony from his
coworkers that he almost never arrived before 7:00 p.m. or later and typically left before 4:00 a.m.
Given the imprecise nature of the testimony given by Pena’s coworkers and the absence of
records, the Court’s finding is necessarily approximate.
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3
Kim did not require Pena to notify him when he started or ended his shift,
although Kim sometimes asked other employees about Pena’s hours.
Pena
occasionally paid other employees to fill in for him managing the slot machines, and
Kim did not object.
When Pena managed the slot machines, Kim supplied him with $20,000 per
week from which to make customer payouts. At the end of each workday, Pena
collected money from the machines and placed it in a safe in Kim’s office. He also
maintained a ledger of customer payouts and amounts removed from each machine.
At the end of the week, he showed Kim the ledger book and gave him the earnings
from the machines. Kim split the profits with the company from whom he leased the
machines.
On June 26, 2015, police destroyed the slot machines.
I. Employee Status
As an initial matter, the Court rejects Defendants’ argument that Pena did not
qualify as a covered employee under the FLSA and NYLL after he started managing
the slot machines.
Employee status under the NYLL depends on whether the worker “(1) worked
at his own convenience, (2) was free to engage in other employment, (3) received
fringe benefits, (4) was on the employer’s payroll and (5) was on a fixed schedule.”
4
Bynog v. Cipriani Grp., Inc., 1 N.Y.3d 193, 198 (N.Y. 2003). The “critical inquiry .
. . pertains to the degree of control exercised by the purported employer over the
results produced or the means used to achieve the results.” Id.
Here, the evidence shows that Kim controlled the results produced and the
means of producing them. Kim provided the slot machines and the money Pena used
to pay winning customers. Kim also required Pena to give a weekly accounting.
Kim thus exerted an amount of control inconsistent with independent contractor
status.
Application of the factors also shows that Pena was an employee. First,
although Kim was not strict about Pena’s hours, Pena was not free to perform the
work whenever he wished. He was required to manage the machines from 4:00 p.m.
to 4:00 a.m., when they were in highest demand. If he were unable to do so, he was
responsible for finding someone to fill in.
The second and third factors are
indeterminate, because there was no testimony regarding whether Pena was free to
engage in other employment or received fringe benefits. However, the fourth and
fifth factors favor employment status: Pena was on Kim’s payroll and on a fixed
schedule, even if he did not always keep his scheduled hours.
For the same reasons, the Court concludes, based on the totality of the
circumstances, that Pena qualified as an employee under the FLSA. Saleem v. Corp.
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Transportation Grp., Ltd., 854 F.3d 131, 139 (2d Cir. 2017) (stating that, in assessing
employment status under the FLSA, the Court considers the “totality of the
circumstances” and focuses on “whether, as a matter of economic reality, the worker[]
depend[s] upon someone else’s business for the opportunity to render service or are
in business for themselves”).
II. Wage Statement and Wage Notice Claims
Under the NYLL, an employer must provide wage and hour notices informing
the employees of the rate and basis of pay and other pertinent information. N.Y. Lab.
Law ' 195(1)(a). An employee who does not receive such notice is entitled to
damages of $50 per day up to a total of $5,000. Id. § 198(1-b).
Similarly, the employer must provide wage statements each time the employee
is paid. The statement must include the rate and basis of pay, the time period covered
by the payment, applicable deductions, the rate of overtime pay, and the number of
overtime hours worked. Id. ' 195(3). Failure to receive such statements entitles an
employee to damages of $250 per day up to a total of $5,000. Id. § 198(1-d).
Here, Defendants concede that they did not provide the required wage notice
or wage statements. For each violation, Pena is entitled to the statutory maximum
damages of $5,000. Thus, for Pena’s wage notice and statement claims under the
NYLL, the Court awards $10,000 plus costs and reasonable attorney’s fees. See N.Y.
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Lab. Law §§ 198(1-b), (1-d).
III. Overtime Claim
Under the FLSA, an employee who works overtime must be paid 1.5 times the
regular rate of pay for any hours worked in excess of a forty-hour work week. See
Nakahata v. New York-Presbyterian Healthcare Sys., Inc., 723 F.3d 192, 200 (2d Cir.
2013) (citing 29 U.S.C. ' 207(a)). The NYLL incorporates the FLSA’s overtime pay
requirement. Id. (citing N.Y.C.R.R. ' 142-2.2).
Where, as here, an employer fails to keep records of overtime hours worked,
an employee must introduce “sufficient evidence to show the amount and extent of
that work as a matter of just and reasonable inference.”
Tyson Foods, Inc. v.
Bouaphakeo, 136 S. Ct. 1036, 1047 (2016) (quoting Anderson v. Mt. Clemens Pottery
Co., 328 U.S. 680, 687 (1946)). An employee may satisfy that burden “through
estimates based on his own recollection.” Kuebel v. Black & Decker Inc., 643 F.3d
352, 362 (2d Cir. 2011). “The burden then shifts to the employer to come forward
with evidence of the precise amount of work performed or with evidence to negative
the reasonableness of the inference to be drawn from the employee’s evidence.”
Tyson Foods, 136 S. Ct. at 1047.
Where an employee receives a weekly salary, the regular rate of pay is
calculated by dividing the weekly salary by forty. 29 C.F.R. § 778.109; 29 U.S.C.
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§ 207(e); Berrios v. Nicholas Zito Racing Stable, Inc., 849 F. Supp. 2d 372, 385
(E.D.N.Y. 2012) (rebuttable presumption that weekly pay represents the first 40 hours
worked and does not include overtime); 12 N.Y.C.R.R. § 146-3.5 (applying same
calculation method under NYLL).
Under the NYLL, a plaintiff may recover liquidated damages unless the
employer establishes a good faith basis for believing his underpayment of wages was
legal. See Rios v. B B Q Chicken Don Alex, Inc., 2018 WL 264512, at *6 n.5
(E.D.N.Y. Jan. 2, 2018) (citing N.Y. Lab. Law § 198(1-a)). Prior to April 9, 2011,
the measure of liquidated damages was 25% of total unpaid wages. Pinovi v. FDD
Enterprises, Inc., 2015 WL 4126872, at *6 (S.D.N.Y. July 8, 2015) (citing N.Y. Lab.
Law §§ 198(1-a), 663(1). However, with an amendment effective April 9, 2011,
liquidated damages equal 100% unpaid wages.
Here, as Defendants admit, they put forth no evidence supporting a good-faith
belief that the nonpayment of overtime wages was legal. Liquidated damages are
therefore appropriate in the amounts calculated below.
A. First Period: July 16, 2009 to July 17, 20105
During this 52-week period, Pena worked two hours of unpaid overtime each
The NYLL has a six-year statute of limitations. N.Y. Lab. Law § 663(3). The Complaint was
filed on July 16, 2015; the Court therefore disregards as time-barred all hours worked prior to July
16, 2009. For this claim and those that follow, the testimony specified months but not precise
dates. The Court chose the dates within the specified months for the sake of convenience.
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week. His regular rate of pay was $15/hour ($600/40), making his overtime rate of
pay $22.50/hour ($15 x 1.5). For 104 hours of overtime, Pena’s unpaid overtime
wages are $2,340 ($22.50 x 104). He is entitled to compensatory damages in that
amount. He is also entitled to liquidated damages for this period totaling $585
($2,340 x .25).
B. Second Period: July 18, 2010 to December 31, 2013
Pena worked 9 hours of unpaid overtime each week for 180 weeks. His
overtime rate was $26.25 ($700/40 x 1.5). For 1,620 hours of overtime, his unpaid
overtime totals $42,525 (1,620 x $26.25), for which he is entitled to compensatory
damages.
His liquidated damages during this period require two separate calculations due
to the amendment on April 9, 2011, discussed above. For the 38 weeks, or 342 hours,
of overtime accrued prior to that date, Pena is entitled to liquidated damages of
$2,244.38 (342 x $26.25 x .25). For the 142 weeks, or 1,278 hours, of overtime after
that date, he is entitled to $33,547.50 in liquidated damages (1,278 x $26.25).
C. Third Period: January 1, 2014 to January 28, 2014
For the first four weeks that Pena managed the slot machines, he worked 44
hours of unpaid overtime each week for a total of 176 hours. His regular rate of pay
was $26.25 ($1,050 / 40). At an overtime rate of $39.38 per hour ($1,050/40 x 1.5),
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his unpaid overtime wages were $6,930.88 (176 x $39.38). He is entitled to both
compensatory damages and liquidated damages in that amount.6
D. Fourth Period: January 29, 2014 to June 26, 2015
For the final 73 weeks of his employment, Pena worked unpaid overtime of 2
hours per week for a total of 146 hours. At an hourly overtime rate of $39.38, Pena
is entitled to compensatory damages of $5,749.48. He is entitled to liquidated
damages in the same amount.
E. Summary of Overtime Damages
The following table summarizes Pena’s compensatory and liquidated damages
for each period of unpaid overtime.
TABLE 1
TIME PERIOD
1
2a
2b
3
4
7/16/2009 to 7/17/2010
7/18/2010 to 4/8/2011
4/9/2011 to 12/31/2013
1/1/2014 to 1/28/2014
1/29/2014 to 6/26/2015
OT
OT
HOURS RATE
104
$22.50
342
$26.25
1,278
$26.25
44
$39.38
146
$39.38
TOTALS:
COMPENSATORY
DAMAGES
$2,340
$8,977.50
$33,547.50
$6,930.88
$5,749.48
$57,545.36
LIQUIDATED
DAMAGES
$585
$2,244.38
$33,547.50
$6,930.88
$5,749.48
$49,057.24
The Court acknowledges that public policy may weigh against allowing recovery of wages
earned in service to an illegal gambling operation. However, neither party raised the issue, and
courts typically decline to limit recovery under similar circumstances. See, e.g., Kennedy v. Helix
TCS, Inc., 284 F. Supp. 3d 1186, 1189-90 (D. Colo. 2018) (illegal marijuana worker covered by
FLSA); Balbuena v. IDR Realty LLC, 6 N.Y.3d 338, 358-59 (N.Y. 2006) (illegal immigrants
covered by NYLL).
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IV. Spread of Hours Claim
Pena has failed to establish a spread of hours claim.
Under NYLL, “[a]n employee shall receive one hour’s pay at the basic
minimum hourly wage rate, in addition to the minimum wage required herein for any
day in which . . . the spread of hours exceeds 10 hours.” Rios, at *5 (citing 12
N.Y.C.R.R. § 142-2.4).
Although Pena’s hours during the Third Period exceeded 10 hours per day, the
spread of hours requirement is “inapplicable to an employee who makes over the
minimum wage.” Berrios v. Nicholas Zito Racing Stable, Inc., 849 F. Supp. 2d 372,
389 (E.D.N.Y. 2012). Pena’s regular rate of pay during the Third Period was $26.25,
well above the minimum wage.
V. Prejudgment Interest
Pursuant to N.Y. Civil Practice Law and Rules § 5001(a), Pena is entitled to
prejudgment interest on his unpaid overtime wages “to compensate [him] for the loss
of use of money.” Reilly v. Natwest Markets Grp. Inc., 181 F.3d 253, 265 (2d Cir.
1999) (quoting Chandler v. Bombardier Capital Inc., 44 F.3d 80, 83 (2d Cir.1994)).
Because the unpaid wages due became due at different times, the Court picks a
“reasonable intermediate” date of July 5, 2012, half way through the period at issue,
from which to calculate prejudgment interest. Id.; N.Y. CPLR § 5001(b). Interest
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shall accrue from that date on Pena’s unpaid overtime wages at a rate of 9% per year
until the date of judgment. N.Y. CPLR § 5004; McLean v. Garage Mgmt. Corp.,
2012 WL 1358739, at *11 (S.D.N.Y. Apr. 19, 2012).
CONCLUSION
Pena is awarded damages of $147,095.33, consisting of the following amounts:
$10,000 for his wage notice and wage statement claims; compensatory damages of
$57,545.36 plus prejudgment interest of $30,492.73 (9% per year since July 5, 2012);
and liquidated damages of $49,057.24.
Pena is further entitled to costs and
reasonable attorney’s fees.7
SO ORDERED
/S/ Frederic Block
____________________________
FREDERIC BLOCK
Senior United States District Judge
Brooklyn, New York
May 23, 2018
The parties shall endeavor reach an agreement on attorney’s fees within 30 days of entry of this
order to avoid unnecessary litigation on these “collateral issues.” Cont’l Cas. Co. v. Marshall
Granger & Co., LLP, 2017 WL 1901969, at *6 (S.D.N.Y. May 9, 2017) (citing Sprague v. Ticonic
Nat. Bank, 307 U.S. 161, 170 (1939)). If they fail to reach an agreement, Plaintiff may make an
application to the Court.
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