Hayward v. IBI Armored Services, Inc. et al

Filing 85

ORDER granting 70 Motion for Summary Judgment; denying 71 Motion for Summary Judgment; denying 71 Motion for Declaratory Judgment Ordered by Judge I. Leo Glasser on 4/11/2019. (Perlman, Alexa)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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TRAVIS HAYWARD, on behalf of himself and
all other similarly situated,
Plaintiff,

MEMORANDUM AND ORDER
17-CV-02944

- against IBI ARMORED SERVICES, INC., and
MICHAEL SHIELDS,
Defendants.
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GLASSER, Senior United States District Judge:
On May 15, 2017, Travis Hayward (“Plaintiff Hayward”) and 28 other plaintiffs
(“Plaintiffs”) brought this action against Defendants IBI Armored Services and Michael Shields
(“Defendants”) alleging that they failed to provide minimum, overtime, and spread of hours
compensation and wage statements in violation of the Fair Labor Standards Act (“FLSA”), New
York Labor Law (“NYLL”), and New York State Wage Theft Prevention Act (“WTPA”). (ECF
No. 1, “Complaint”). Pending before the Court is Defendants’ motion for partial summary
judgment, or in the alternative, a declaratory judgment pursuant to Rules 56 and 57 of the Federal
Rules of Civil Procedure and Plaintiffs’ cross-motion pursuant to the same. (ECF Nos. 70, 71).
For the reasons explained below, Defendants’ motion is GRANTED and Plaintiffs’ motion is
DENIED.
BACKGROUND
Plaintiffs are either current or former employees of IBI Armored Services, Inc., a vehicle
service that transports money to and from grocery stores and banks in New York City. (Complaint
¶¶ 15-17, 25). They claim that since May 2014, they were not paid minimum wage, overtime, or

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spread of hours compensation and that they were not given proper wage statements. (Id. at ¶¶ 25,
30). The details surrounding each Plaintiffs’ terms of employment are in dispute and are not
relevant for the determination of these summary judgment motions.
LEGAL STANDARDS
I.

Summary Judgment Standard
Summary judgment is appropriate when there are “no genuine issues as to any material fact

and that the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c); see
also Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585-87 (1986). A
genuine issue of material fact exists if a reasonable jury could find in favor of the non-moving
party. Anderson v. Liberty Lobby, Inc., 477 U.S.242, 248 (1986). The moving party has the burden
to demonstrate the absence of a genuine issue of material fact, and the Court must draw all
reasonable inferences in favor of the non-moving party. Id. at 255.
If the summary judgment movant satisfies its initial burden of production, the burden of
proof shifts to the non-movant who must demonstrate that a genuine issue of fact does exist. Id.
at 250. The non-moving party “must do more than simply show that there is some metaphysical
doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd., 475 U.S. at 586. Rule 56(e)
“requires the nonmoving party to go beyond the pleadings and by [its] own affidavits, or by the
‘depositions, answers to interrogatories, and admission on file,’ designate ‘specific facts showing
that there is a genuine issue for trial.’” Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). Once
the nonmovant has met that requirement, its “allegations [will be] taken as true, and [it] will receive
the benefit of the doubt when [its] assertions conflict with those of the movant.” Samuels v.
Mockry, 77 F.3d 34, 36 (2d Cir. 1996).

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The Court’s role in a motion for summary judgment is one of “issue-finding,” not “issueresolution.” Ramirez v. New York City Bd. of Educ., 481 F. Supp. 2d 209, 216 (E.D.N.Y. 2007).
Therefore, the Court’s charge is not to “weigh the evidence and determine the truth of the matter
but to determine whether there is a genuine issue for trial.” Anderson, 477 U.S. at 249. Where, as
here, cross-motions for summary judgment are made, the court must rule on each party’s motion
on an individual and separate basis, determining, in each case, whether a judgment may be entered
in accordance with the Rule 56 standard. Johnson & Johnson Fin. Corp. v. BSR Realty L.P., No.
CV-96-0527 (ILG), 1996 WL 546284, at *2 (E.D.N.Y. Sept. 19, 1996).
II.

Declaratory Judgment Standard
The Declaratory Judgment Act provides that “any court of the United States . . . may

declare the rights and other legal relations of any interested party seeking such a declaration,
whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a). A declaratory judgment
action is ripe for adjudication where “there is a substantial controversy, between parties having
adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory
judgment.” Duane Reade, Inc., v. St. Paul Fire and Marine Ins. Co., 411 F.3d 384, 388 (2d Cir.
2005). When deciding whether to entertain an action for a declaratory judgment, a District Court
must ask: (1) whether the declaratory judgment will serve a useful purpose in clarifying or settling
the legal issues involved; and (2) whether the judgment would finalize the controversy and offer
relief from uncertainty. Id. Here, the Court answers both questions in the affirmative.
DISCUSSION
Defendants are seeking summary judgment of Plaintiffs’ FLSA and NYLL overtime
claims, or in the alternative, a declaratory judgment stating that Plaintiffs are not entitled to
overtime under the NYLL because they are subject to the FLSA’s Motor Carrier Exemption, which

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provides that mandatory overtime compensation does not apply to “any employee with respect to
whom the Secretary of Transportation has power to establish qualifications and maximum hours
of service pursuant to the provisions of section 31502 of Title 49 . . . .” 29 U.S.C. § 213(b)(1).
Those employees include “motor carrier[s],” who “[provide] commercial motor vehicle
transportation for compensation.” Fox v. Commonwealth Worldwide Chauffeured Transp. of NY,
LLC, 865 F. Supp. 2d 257, 268 (E.D.N.Y. 2012) (quoting 49 U.S.C. § 13102(14)). A “commercial
motor vehicle,” in turn, is “a self-propelled or towed vehicle used on the highways in interstate
commerce to transport passengers or property, if the vehicle . . . has a gross vehicle weight rating
or gross vehicle weight of at least 10,001 pounds . . . .” 49 U.S.C. § 31132(1)(A).
The parties do not dispute that with the exception of four individuals, Plaintiffs are subject
to the FLSA’s Motor Carrier Exemption under 29 U.S.C. § 213(b)(1) and therefore the overtime
claim with respect to those 25 Plaintiffs under the FLSA is dismissed. However, those 25 Plaintiffs
request summary judgment of their overtime and wage statement claims under the NYLL, arguing
that the New York State Minimum Wage Order mandates that even employees who are exempt
pursuant to the FLSA’s Motor Carrier Exemption are nevertheless entitled to overtime
compensation under the NYLL. The Court will address these arguments below.
I.

The NYLL and Motor Carrier Exemption
The New York Department of Labor issued a Minimum Wage Order to the NYLL, which

provides that “[a]n employer shall pay an employee for overtime at a wage rate of one and onehalf times the employee’s regular rate in the manner and methods provided in and subject to the
exemptions of . . . the Fair Labor Standards Act . . . .” 12 N.Y.C.R.R. § 142-2.2. While the
regulation provides that the NYLL is subject to the exemptions of the FLSA, it does not
specifically mention the Motor Carrier Exemption.

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Id.

However, on June 30, 2010, the

Department of Labor issued an opinion letter concluding that because “nothing within the [NYLL]
or the Minimum Wage Orders otherwise excludes such employees from the definition of
‘employee’ contained therein, and therefore, from the overtime requirements described above . . .
even if these employees meet the requirements of the Motor Carrier Exception in Section
[2]13(b)(1)1 of the FLSA, they must, under the New York Labor Law, be paid not less than one
and one half times the minimum wage rate for all overtime hours worked.” (See Declaration of
Peter H. Cooper, Exhibit D).
Defendants claim that the Department of Labor’s opinion letter is not entitled to deference
because “[t]he New York Court of Appeals has settled that agency determinations involving ‘pure
legal interpretation of statutory terms[]’ are not entitled to deference by courts reviewing these
determinations.” (ECF No. 70-1 at 11-12) (citing Matter of Toys “R” Us v. Silva, 89 N.Y.2d 411,
419, 676 N.E.2d 862, 866, 654 N.Y.S.2d 100, 104 (1996)). Plaintiffs, on the other hand, argue
that “under both federal and New York law, an agency’s interpretation of its own regulation is
indeed entitled to some deference, particularly if there is any ambiguity in the regulation.” (ECF
No. 76 at 9) (citing to Cordiano v. Metacon Gun Club, Inc., 575 F.3d 199, 201 (2d Cir. 2009)).
Both parties misstate the applicable standard.2

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The Department of Labor erroneously referred to Section 13(b)(1) of the FLSA as the Motor
Carrier Exemption rather than Section 213(b)(1), which is the appropriate section.

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The Court of Appeals in Toys “R” Us acknowledged that “in questions relating to its expertise,
[the agency’s] interpretation of the statute’s terms must be given great weight and judicial
deference, so long as the interpretation is neither irrational, unreasonable, nor inconsistent with the
governing statute.” That case addressed the “proper legal standard for determining when a
nonconforming use is abandoned” under a specific zoning ordinance, which was a question of
“pure legal interpretation of statutory terms,” and therefore “deference to [the agency was] not
required.” 89 N.Y.2d at 418-19, 676 N.E.2d at 866, 654 N.Y.S.2d at 104. Similarly, the court in
Cordiano also noted that it will “generally defer to an agency’s interpretation of its own regulations
. . . so long as the interpretation is not plainly erroneous or inconsistent with law.” 575 F.3d at
207.
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The correct standard to be applied arises from the Supreme Court’s decision in Chevron,
U.S.A., Inc. v. Natural Resources Defense Council. Inc., which held that
When a court reviews an agency’s construction of the statute which it administers,
it is confronted with two questions. First, always, is the question whether Congress
has directly spoken to the precise question at issue. If the intent of Congress is
clear, that is the end of the matter; for the court, as well as the agency, must give
effect to the unambiguously expressed intent of Congress. If, however, the court
determines Congress has not directly addressed the precise question at issue, the
court does not simply impose its own construction of the statute, as would be
necessary in the absence of an administrative interpretation. Rather, if the statute
is silent or ambiguous with respect to the specific issue, the question for the court
is whether the agency’s answer is based on a permissible construction of the statute.
467 U.S. 837, 842-43. Applying those principles here, the Court finds that the Department of
Labor’s intent was clearly expressed in Minimum Wage Order 12 N.Y.C.R.R. § 142-2.2 and that
the NYLL adopts the FLSA’s Motor Carrier Exemption. The Minimum Wage Order explicitly
provides that the mandatory overtime rate is “subject to the exemptions of . . . the Fair Labor
Standards Act . . . .” 12 N.Y.C.R.R. § 142-2.2. That the Department of Labor did not specifically
mention the Motor Carrier Exemption is of no consequence because that exemption is embraced
by the FLSA and therefore need not be cited in isolation. Further, even if the Court determined
that the Minimum Wage Order was “silent” as to the Motor Carrier Exemption issue, the
Department of Labor’s interpretation, that employees who are subject to the exemption under the
FLSA are nevertheless entitled to overtime because neither the NYLL nor the Minimum Wage
Order “exclude[] such employees from the definition of ‘employee,’ contained therein,” is an

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impermissible construction of the regulation given that it expressly includes all exemptions to the
FLSA.3 Accordingly, Plaintiffs’ overtime claim under the NYLL is dismissed.4
II.

Plaintiffs’ Wage Statement Claims
Plaintiffs also request summary judgment of their wage statement claim under the NYLL.

It is undisputed that the weekly paystubs given to Plaintiffs did not indicate the number of hours
worked or the hourly rate of compensation during each pay period. (ECF No. 79 ¶¶ 7-8;
Declaration of Peter H. Cooper, Exhibit J). However, Defendants intend to assert an affirmative
defense pursuant to NYLL § 198(1-d), namely that “[e]ven if Defendants failed to give Plaintiffs
proper Wage Notices and/or Statements, Defendants cannot be liable as they made complete and
timely payment of all wages due.” (ECF No. 77-2).5 Because there is a genuine issue of material
fact as to whether Defendants made complete and timely payment of all wages due, Plaintiffs’
motion for summary judgment as to their wage statement claim is denied.

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Several other courts in this Circuit have found, even after the Department of Labor’s June 30,
2010 opinion letter, that the NYLL adopts the FLSA’s Motor Carrier Exemption. See e.g., Fox,
865 F. Supp. 2d 257, 268-69; Tang v. Wing Keung Enterprises, Inc., No. 14-CV-390 (JBW) (LB),
2016 WL 6110454, at *3 (E.D.N.Y. July 11, 2016), report and recommendation adopted sub nom.,
Chaohui Tang v. Wing Keung Enterprises, Inc., 210 F. Supp. 3d 376 (E.D.N.Y. 2016); D'Arpa v.
Runway Towing Corp., No. 12-CV-1120, 2013 WL 3010810, at *18 (E.D.N.Y. June 18, 2013);
Serebryakov v. Lokeko Inc., No. 12-CV-3990 (AMD), 2016 WL 5061111, at *1 (E.D.N.Y. Sept.
16, 2016).

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Plaintiffs note that Defendants issued statements to their employees after this action was
commenced, acknowledging that under the NYLL, they were required to pay overtime. (See
Declaration of Peter H. Cooper, Exhibits G & H). Defendants argue that these statements cannot
be considered by the Court because they are subsequent remedial measures under Rule 407 of the
Federal Rules of Evidence. If Defendants’ were correct, that they were required to pay overtime
under the NYLL, their statements would be admissions, not subsequent remedial measures. In any
event, these arguments are irrelevant given that Defendants were not bound under the NYLL to
pay overtime.

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The Court granted Defendants’ motion to amend their Answer on April 5, 2019. (ECF No. 84).
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CONCLUSION
Accordingly, Defendants’ motion for summary judgment as to Plaintiffs’ overtime claims
under the FLSA and NYLL is GRANTED and Plaintiffs’ cross-motion for summary judgment as
to their overtime and wage statement claims is DENIED. The overtime claim with respect to the
four non-exempt Plaintiffs is still in dispute.
SO ORDERED.
Dated:

Brooklyn, New York
April 11, 2019
/s
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I. Leo Glasser

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U.S.D.J.