Zhao v. Ke Zhang Inc. et al

Filing 52

MEMORANDUM & ORDER: Defendants' motion for summary judgment #44 is granted in part and denied in part. Defendants Li Hui Zhu and Xiang Keng Zhu are dismissed. Plaintiffs' FLSA claims against T&T restaurant and Wen Chai Zou are also dismissed. ORDER ATTACHED. Ordered by Judge Eric R. Komitee on 3/31/2021. (Guy, Alicia)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
------------------------------------x
PIYOU ZHAO and ZHIQIANG WANG, on
behalf of themselves and others
similarly situated,

MEMORANDUM & ORDER
18-CV-6452(EK)(VMS)

Plaintiffs,
-againstKE ZHANG INC. d/b/a KE ZHANG, ZOU JIA
YONG, INC. d/b/a T & T RESTAURANT,
WEN CHAI ZOU, LI HUI ZHU, XIANG KENG
ZHU, and TENGYU ZHU,
Defendants.
------------------------------------x
ERIC KOMITEE, United States District Judge:

Piyou Zhao and Zhiqiang Wang bring this action against
two family-run restaurants, Ke Zhang Inc. (“Ke Zhang”) and Zou
Jia Yong, Inc. (“T&T”), and their owners.

Plaintiffs were

initially hired to make deliveries for Ke Zhang, but ended up
making some deliveries for T&T as well.

They claim that during

their employment, the Defendants violated the Fair Labor
Standards Act (“FLSA”) and New York Labor Law (“NYLL”) by
failing to pay them appropriate wages and to provide them
certain wage notices.
Defendants now move for summary judgment.

They argue

that the FLSA does not apply to them; that no defendant except
Ke Zhang and one of its owners actually qualified as Plaintiffs’
statutory “employers”; that no violation was “willful,” and

therefore a two-year statute of limitations should apply to the
FLSA claims; and that they acted in “good faith,” which
precludes liquidated damages.

For the following reasons, the

Defendants’ motion is granted in part and denied in part.
Background
The following factual recitation is drawn from the
parties’ deposition testimony, unless otherwise noted.

The

defendants are two restaurants — T&T and Ke Zhang — and their
owners.

T&T is a small take-out restaurant in Flushing, Queens

that offers breakfast and other light fare.

Deposition of Wen

Chai Zou 12:10-13, 13:6-10, 19:9-12, ECF No. 44-7 (“Chai Dep.”).
During the period in question, T&T was owned by Wen Chai Zou and
her husband Xiang Keng Zhu. 1

Chai Dep. 9:6-7, 9:21-10:7.

It is

not clear from the evidentiary record how profitable T&T was.
Chai Dep. 13:15-18 (testifying that she did not know how much
T&T made in sales).

Across the street from T&T is Ke Zhang, a

full-service restaurant operated by the T&T owners’ son, Tengyu
Zhu, and daughter, Li Hui Zhu.

Deposition of Tengyu Zhu 12:6-

14, ECF No. 44-8 (“Tengyu Dep.”); Chai Dep. 13:19-14:8.

Ke

Zhang is a larger restaurant that offers lunch and dinner, and

This Order will refer to the individual defendants by their first
names, because several of them share the same last name.
1

2

generates between $700,000 and $800,000 per year in sales.
Tengyu Dep. 21:22-22:1.
Tengyu hired Plaintiffs Zhao and Wang to make
deliveries for Ke Zhang — Zhao in August 2014 and Wang in March
2016.

Deposition of Piyou Zhao 8:15-17, 10:17-20, ECF No. 44-4

(“Zhao Dep.”); Deposition of Zhiqiang Wang 7:19-8:2, ECF No.
44-3 (“Wang Dep.”).

According to Plaintiffs, they also

performed other tasks at Ke Zhang such as deconstructing boxes
for recycling and cleaning the parking lot.

Zhao Dep. 9:3-18;

Wang Dep. 46:23-47:18.
Plaintiffs also occasionally made deliveries for T&T.
T&T did not offer delivery services until Zhao proposed to Chai
that he would make deliveries for that restaurant in exchange
for breakfast.

Chai Dep. 15:25-16:6; Zhao Dep. 36:21-37:2.

Wang also made T&T deliveries in exchange for breakfast.
Dep. 42:2-8; see also Chai Dep. 20:18-21.

Wang

T&T made only about

two to three deliveries per week, see Chai Dep. 15:25-16:16, and
Tengyu testified that those deliveries typically occurred in the
morning, before Ke Zhang opened.

Tengyu Dep. 67:15-25.

Chai

coordinated with Plaintiffs when an order needed to be
delivered, but Plaintiffs were not always available when asked.
Chai Dep. 21:5-11.

Chai’s husband Xiang, who is also a

defendant here, worked as a cook at T&T but did not interact
with either named Plaintiff.

Chai Dep. 21:12-16; see also
3

Deposition of Xiang Keng Zhu, 10:14-16, 14:16-19, ECF No. 44-6
(“Xiang Dep.”).

Chai testified that the value of the breakfasts

that Plaintiffs received in exchange for morning deliveries was
between one and four dollars a day.

Chai Dep. 17:2-4, 19:9-16.

She kept no records of how much Plaintiffs would have owed if
they had purchased these meals.

Chai Dep. 22:14-21.

The bulk of Plaintiffs’ work was making deliveries for
Ke Zhang, where Tengyu was “the boss.”

Tengyu Dep. 12:2.

Tengyu was in charge of hiring and firing, setting schedules,
and paying salaries.

Tengyu Dep. 34:17-19, 59:12-22; Deposition

of Li Hui Zhu 11:2-6, 26:3-6, ECF No. 44-5 (“Li Hui Dep.”); Zhao
Dep. 41:18-22.

Although Li Hui owns fifty percent of Ke Zhang,

she leaves management decisions to her brother.
12:6-15; Li Hui Dep. 14:16-19.

Tengyu Dep.

Li Hui had previously worked for

Ke Zhang part-time, but now only comes in for a few hours when
needed, and helps with tasks such as answering the phone,
working the cash register when the cashier is unavailable, and
taking and packing orders.

Tengyu Dep. 17:15-21; Li Hui Dep.

17:16-25, 20:18-25.
Tengyu testified that he was not familiar with labor
law requirements, despite being in charge of Ke Zhang’s
compensation policies.

Tengyu understood that “overtime” meant

an employee working over forty hours in a given week, but he did
not know how to calculate his employees’ overtime rates and had
4

never done so before.

Tengyu Dep. 35:10-19.

keep records of his employees’ hours.

Tengyu did not

He would write his

employees’ hours “on a piece of paper for myself to review,” but
then would “basically dispose” of these records “the same day.”
Id. 35:20-36:10.

Tengyu’s accountant gave him a wage poster

that he hung on the wall, but he “didn’t pay attention to it”;
he testified that he did not understand it because he can only
read a “little bit” of English.

Id. 60:10-61:7, 69:11-12.

Tengyu did not give Zhao or Wang a “wage notice” when he hired
them.

Id. 37:17-23, 59:12-19.

He believed that Wang and Zhao

made “far more than whatever the government requires” and Tengyu
“never imagined” they would challenge their wages.

Id. 37:23-

38:2, 39:8-11 (“I thought [Zhao made] more than enough.”).

Chai

also testified that she was not aware of federal or state labor
laws.

Chai Dep. 23:2-4.
Tengyu fired Zhao in October 2018 after receiving a

customer complaint.

Zhao Dep. 47:16-25.

Wang left Ke Zhang in

March 2019 on disability after suffering an injury at that
restaurant.

Defs.’ Br. in Support of Motion at 8, ECF No. 44-2.

In November 2018, Zhao initiated this lawsuit, which
Wang later joined.

The Amended Complaint alleges claims under

the FLSA and NYLL, including for unpaid minimum and overtime
wages and liquidated damages.

In addition, Plaintiffs allege

they were not paid the requisite “spread of hours” pay under the
5

NYLL, which mandates one additional hour of pay at the state
minimum hourly rate for any workday that lasts longer than ten
hours.

Plaintiffs also claim they were not provided with

paystubs or with a wage notice at the time of hiring, as
required by the NYLL.
Legal Standard
Summary judgment is appropriate “if the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Civ. P. 56(a).

Fed. R.

A genuine dispute of material fact exists “if

the evidence is such that a reasonable jury could return a
verdict for the nonmoving party.”

Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 248 (1986).
The moving party may demonstrate the absence of a
genuine issue of material fact “in either of two ways:

(1) by

submitting evidence that negates an essential element of the
non-moving party’s claim, or (2) by demonstrating that the nonmoving party’s evidence is insufficient to establish an
essential element of the non-moving party’s claim.”

Nick's

Garage, Inc. v. Progressive Cas. Ins. Co., 875 F.3d 107, 114 (2d
Cir. 2017).

Each assertion at the summary judgment stage must

cite to the record or show that an adverse party cannot produce
admissible evidence to support a given fact.
56(c)(1); see also Local Rule 56.1.
6

Fed. R. Civ. P.

While all factual

ambiguities must be resolved in favor of the nonmoving party,
“the nonmoving party may not rely on conclusory allegations or
unsubstantiated speculation.”

Fujitsu Ltd. v. Fed. Express

Corp., 247 F.3d 423, 428 (2d Cir. 2001).
When “a party fails to properly support an assertion
of fact or fails to properly address another party’s assertion
of fact as required by Rule 56(c),” a court can “consider the
fact undisputed for purposes of the motion.”
56(e).

Fed. R. Civ. P.

In addition, while a court “is not required to consider

what the parties fail to point out” in their Local Rule 56.1
statements, it may, in its discretion, opt to conduct its own
“assiduous review of the record.”

Holtz v. Rockefeller & Co.,

Inc., 258 F.3d 62, 73 (2d Cir. 2001).
Discussion
A.

Individual and Enterprise Coverage Under the FLSA
An employer is subject to the FLSA on an employee-by-

employee basis if its individual employees are “engaged in
commerce or in the production of goods for commerce” (individual
coverage), or as to all employees if the employer is “an
enterprise engaged in commerce or in the production of goods for
commerce” (enterprise coverage).

Jacobs v. New York Foundling

Hosp., 577 F.3d 93, 96 (2d Cir. 2009) (citing 29 U.S.C.
§ 207(a)(1)) (emphasis omitted).

While both inquiries consider

7

whether employees have some involvement in interstate commerce,
the test for “enterprise coverage” is more lenient.
There is no evidence in the record to establish that
the individual coverage test is satisfied.

Neither party cited

evidence that Plaintiffs “handle[d] or otherwise work[ed] on
goods intended for shipment out of the State” or “perform[ed]
work involving or related to the movement of persons or things .
. . among the several States or between any State and any place
outside thereof.”

See 29 C.F.R. §§ 779.103, 779.104 (emphasis

added); see also McLeod v. Threlkeld, 319 U.S. 491, 497 (1943)
(activities that simply “affect or indirectly relate to
interstate commerce” are insufficient for purposes of individual
coverage).

Indeed, the Plaintiffs’ Rule 56.1 Statement does not

say anything concerning individual coverage.

Ke Zhang and T&T

are both based in Flushing, Queens and there is no indication
that either Plaintiff made deliveries outside of the state.
Plaintiffs concede as much.

They call the restaurants “local

businesses” and address only “enterprise coverage” in their
brief.

Pls.’ Opp. Br. at 4-5, ECF No. 45.

Because there is no

evidence that Plaintiffs had “contact with out-of-state
customers or businesses, [they] cannot be individually covered
under the FLSA.”

Yang Li v. Ya Yi Cheng, No. 10-CV-4664, 2012

WL 1004852, at *4 (E.D.N.Y. Mar. 23, 2012) (restaurant servers
were not individually covered); Jian Long Li v. Li Qin Zhao, 35
8

F. Supp. 3d 300, 308-09 (E.D.N.Y. 2014) (restaurant employee who
only made deliveries intrastate was not individually covered).
Plaintiffs do contend that Ke Zhang and T&T qualify as
“enterprises” under 29 U.S.C. §§ 203(s)(1)(A) and 207(a)(1).

An

employer is an “enterprise” when (1) it has two or more
“employees handling, selling, or otherwise working on goods or
materials that have been moved in or produced for commerce by
any person,” a different standard than individual coverage, and
(2) its “annual gross volume of sales made or business done is
not less than $500,000 (exclusive of excise taxes at the retail
level that are separately stated).”

29 U.S.C. § 203(s)(1)(A)

(emphasis added); see also Jacobs, 577 F.3d at 99 n.7.

Neither

party’s Rule 56.1 statement cites evidence relevant to this
issue either.
inquiry.

Nevertheless, the Court conducted its own

Holtz, 258 F.3d at 73.
There exists a dispute of fact that prevents the Court

from deciding whether Ke Zhang is subject to “enterprise
coverage” at the summary judgment stage.

There is evidence in

the record indicating the second element of the enterprise
coverage test is satisfied:

Tengyu testified that Ke Zhang

makes approximately $700,000 to $800,0000 per year in sales.
Tengyu Dep. 21:25-22:2.

The only question is whether Plaintiffs

have raised a triable issue of fact on the first prong.

But a

plaintiff is “virtually guaranteed to satisfy the first prong,
9

which, unlike the requirement for individual coverage, does not
demand that [the plaintiff] himself” be involved in interstate
commerce.

Jian Long Li, 35 F. Supp. 3d at 306 (quotations

omitted).

Indeed, the threshold on the first prong is extremely

low: courts in this Circuit have found enterprise coverage where
employees “merely handled supplies or equipment that originated
out-of-state.”

Rocha v. Bakhter Afghan Halal Kababs, Inc., 44

F. Supp. 3d 337, 346 (E.D.N.Y. 2014).

Defendants do not contest

that these two Plaintiffs did so; instead, they argue only that
their restaurants do not “prepare or serve food for interstate
consumption” and are “several miles away from any interstate
highway.”

Defs.’ Br. in Support of Motion at 9, ECF No. 44-2.

I thus assume for purposes of this motion that the restaurant is
engaged in interstate commerce as required by enterprise
coverage.

See Loo v. I.M.E. Rest., Inc., No. 17-CV-02558, 2018

WL 6814368, at *4 (E.D.N.Y. Dec. 27, 2018) (denying summary
judgment on enterprise coverage and “assum[ing]” a restaurant
was engaged in interstate commerce).

Therefore, Defendants are

not entitled to summary judgment on the issue of whether Ke
Zhang is a covered enterprise.
Plaintiffs have failed, however, to point to
sufficient evidence that T&T restaurant qualifies as an
enterprise.

Chai testified that she did not know how much T&T

made in sales, Chai Dep. 13:15-18, and there is simply no other
10

evidence in the record on this subject.

The Court therefore

grants summary judgment for Defendants on the FLSA claims
against T&T.

E.g., Jian Long Li, 35 F. Supp. 3d at 307

(granting summary judgment where Plaintiff did not cite evidence
that the restaurant had gross sales of more than $500,000).
B.

Employer Status
Ke Zhang and Tengyu Zhu do not dispute that they were

Plaintiffs’ employers.

Ke Zhang’s other owner, Li Hui Zhu, does

move for summary judgment on this point, as do T&T and its
owners Wen Chai Zou and Xiang Keng Zhu.
In fairly archaic language, the FLSA provides that an
entity “employ[s]” those whom it “suffer[s] or permit[s]” to
work.

29 U.S.C. § 203(g).

This definition “is necessarily a

broad one in accordance with the remedial purpose of the Act.”
Brock v. Superior Care, Inc., 840 F.2d 1054, 1058 (2d Cir.
1988).

The FLSA recognizes the possibility of “joint

employment,” meaning a worker may be employed by more than one
entity or individual at the same time.

Jianjun Chen v. 2425

Broadway Chao Rest., LLC, No. 16-CV-5735, 2017 WL 2600051, at
*3, *6 (S.D.N.Y. June 15, 2017) (citing 29 C.F.R. § 791.2(a)).
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.”

N.Y. Lab. Law §§ 190(3), 651(6).
11

District courts in

this Circuit have interpreted the FLSA and NYLL definitions to
be “coextensive[].”

Sethi v. Narod, 974 F. Supp. 2d 162, 188

(E.D.N.Y. 2013) (collecting cases).

I thus evaluate them

together.
Whether an employer-employee relationship exists is
grounded in “economic reality rather than technical concepts.”
Goldberg v. Whitaker House Coop., Inc., 366 U.S. 28, 33 (1961)
(cleaned up).

The key question is control, and, as relevant

here, the Second Circuit has developed tests to measure both
“formal” control and “functional” control, depending on the
factual circumstances of a particular case.

Barfield v. New

York City Health & Hosps. Corp., 537 F.3d 132, 143 (2d Cir.
2008).
The Second Circuit set out the “formal control” test
in Carter v. Dutchess Cmty. Coll., 735 F.2d 8 (2d Cir. 1984).
This test examines “whether the alleged employer (1) had the
power to hire and fire the employees, (2) supervised and
controlled employee work schedules or conditions of employment,
(3) determined the rate and method of payment, and
(4) maintained employment records.”

Carter, 735 F.2d at 12.

These factors are sufficient, but not necessary, to establish
employer status under the FLSA.

Zheng v. Liberty Apparel Co.

Inc., 355 F.3d 61, 69 (2d Cir. 2003).

12

In Zheng v. Liberty Apparel Co., the Second Circuit
set forth a different test for entities exercising less formal,
but “functional,” control over a worker.

Id. at 72.

Zheng

concerned whether a garment manufacturer was a joint employer
with its subcontractors, for which the plaintiffs worked
directly to assemble the manufacturer’s garments.
F.3d at 63-66.

Zheng, 355

The Court asked:

(1) whether [the manufacturer]’s premises and equipment
were used for the plaintiffs’ work; (2) whether the
[contractors] had a business that could or did shift as
a unit from one putative joint employer to another;
(3) the extent to which plaintiffs performed a discrete
line-job that was integral to [the manufacturer]’s
process of production; (4) whether responsibility under
the contracts could pass from one subcontractor to
another without material changes; (5) the degree to
which the [the manufacturer] or their agents supervised
plaintiffs’ work; and (6) whether plaintiffs worked
exclusively or predominantly for the [the manufacturer].
Barfield, 537 F.3d at 143 (citing Zheng, 355 F.3d at 68).
In general, Carter, Zheng, and other cases “provide ‘a
nonexclusive and overlapping set of factors’ to ensure that the
economic realities test mandated by the Supreme Court is
sufficiently comprehensive and flexible to give proper effect to
the broad language of the FLSA.”

Barfield, 537 F.3d at 143.

This Court is “free to consider any other factors it deems
relevant to its assessment of the economic realities.”
355 F.3d at 71-72.

Zheng,

Below I consider whether a dispute of fact

exists as to, first, Li Hui’s formal control over Plaintiffs,
13

and second, as to whether T&T and its owners exercised
functional or formal control, or some combination thereof.
1.

Li Hui Zhu
Plaintiffs have not established that a reasonable

juror could find Li Hui to be an “employer.”

They point out

that Li Hui was the incorporator of Ke Zhang and part-owner.
Tengyu Dep. 12:6-25.

“Ownership, or a stake in a company,”

however, “is insufficient to establish that an individual is an
‘employer’ without some involvement in the company's employment
of the employees.”

Irizarry v. Catsimatidis, 722 F.3d 99, 111

(2d Cir. 2013); see also Salazar v. 203 Lena Inc., No. 16-CV7743, 2020 WL 2489070, at *4 (S.D.N.Y. May 14, 2020) (whether
defendant was an “officer or shareholder” was not relevant to
“employer” determination).
Plaintiffs also cite testimony that Li Hui would
inform Tengyu if a waiter made a mistake or brought a customer
the wrong order.

Li Hui Dep. 25:11-18.

But “to be an

‘employer,’ an individual defendant must possess control over a
company’s actual ‘operations’ in a manner that relates to a
plaintiff's employment.”

Irizarry, 722 F.3d at 109.

Tengyu

testified that Li Hui is “obligated [to inform him] if somebody
brought the wrong dish or wrong order” and that “even the other
workers are obligated to let me know obviously if an order is
wrong or something like that.”

Tengyu Dep. 34:11-16.
14

There is

no evidence that Li Hui ever reprimanded or reported Plaintiffs
for delivering the wrong order, or that her communications to
her brother resulted in such discipline.

Cf. Gallego v. Adyar

Ananda Bhavean Corp., No. 16-CV-4631, 2018 WL 4735710, at *4
(S.D.N.Y. Sept. 30, 2018) (defendant was not an “employer” where
he testified that it was “not [his] job” to reprimand restaurant
workers if they were not working fast enough).
Plaintiffs also urge the Court to rely on Tengyu’s
purported testimony that he and Li Hui met “quite often” to
discuss the business.

Pls.’ Opp. Br. at 2, ECF No. 45.

a mischaracterization of the record.

This is

Tengyu testified that he

would call his sister “a few days ahead of” when she was needed
at the restaurant, but that they would “meet quite often” so he
would “also use that [] opportunity to let her know” when to
come into work.

Tengyu Dep. 17:15-18:15.

When pressed if he

had a “meeting time” with his sister every week, he responded,
“[s]he is my older sister, so meeting her is quite a normal
thing.”

Id.
Plaintiffs have failed to identify evidence — even

disputed evidence — sufficient to establish that Li Hui
exercised “formal control” over Plaintiffs under the Carter
test.

Li Hui’s part-ownership, together with the testimony that

she would point out workers’ mistakes, are simply insufficient —
both on their own and in light of the undisputed evidence
15

proffered by Defendants.

Defendants produced testimony that:

Tengyu was responsible for hiring and firing employees, setting
their schedules, and overseeing their pay.

Tengyu Dep. 34:17-

19; Li Hui Dep. 11:2-6, 26:3-6; Zhao Dep. 41:18-22.

Li Hui

provided no input into these decisions, leaving all managerial
responsibilities to her brother.
26:3-6.

Li Hui Dep. 11:2-6, 14:16-19,

She instead performed tasks such as helping with the

cash register, answering the phones, and packing takeout orders.
Tengyu Dep. 17:18-21; Li Hui Dep. 20:18-25; cf. Gallego, 2018 WL
4735710, at *4 (defendant was not an employer where his work
“consisted of instructing delivery workers about when food was
ready and where it should be taken”).

Defendants’ motion to

dismiss Li Hui is granted.
2.

T&T and its Owners, Wen Chai Zou and Xiang Keng Zhu
There is a dispute of fact about whether T&T qualifies

as a joint employer under the Zheng test.
formally hired by T&T, nor paid by it.

Plaintiffs were not

There are indications,

however, that T&T had at least some functional control over
Plaintiffs’ work.
for T&T.

Chai agreed to let Plaintiffs make deliveries

Chai Dep. 15:25-16:6.

Chai would call Plaintiffs when

there was a delivery order; Plaintiffs would pick up the orders
at T&T and make deliveries to T&T customers.

Id. 20:18-21:11.

These deliveries occurred two to three times a week, on top of
Plaintiffs’ delivery schedule for Ke Zhang.
16

Id. 16:11-16;

Tengyu Dep. 67:15-25.

Ke Zhang and T&T were run by the same

family and located across the street from each other, Chai Dep.
13:25-14:4, making it easy for Plaintiffs’ work to “shift . .
from one putative joint employer to another.”
at 68.

.

Zheng, 355 F.3d

Although T&T did not pay Plaintiffs, it assumed other

traditional functions of a restaurant employer by offering them
compensation in the form of free meals.

Chai Dep. 15:25-16:6;

Tengyu Dep. 67:15-25; see also Defs.’ Rule 56.1 Statement ¶ 7,
ECF No. 44-1 (Plaintiffs were provided “free” breakfast, lunch,
and dinner when they worked for Ke Zhang during those times).

A

reasonable juror could thus find that T&T was Plaintiffs’
employer.

Defendants’ motion to dismiss T&T is denied.
For similar reasons, a reasonable juror could conclude

that Chai was Plaintiffs’ employer.

As part-owner of T&T, see

Chai Dep. 9:21-10:7, Zhao proposed to Chai that he would make
deliveries for T&T, and she was responsible for calling
Plaintiffs when T&T received a delivery order.

Id. 15:25-16:6;

20:18-21:11; see also Chai Dep. 18:6-11 (“[M]y son [Tengyu] said
let him just deliver one or two meals” for T&T).

There is

therefore a dispute, at least, over whether Chai set Plaintiffs’
schedules for T&T.

See e.g., Hernandez v. Jrpac Inc., No. 14-

CV-4176, 2016 WL 3248493, at *2, *22 (S.D.N.Y. June 9, 2016)
(individual who “supervised and controlled the employees’ work
schedules and conditions of employment” and “assign[ed] them
17

their job responsibilities” was an employer”); cf. Jianjun Chen,
2017 WL 2600051, at *4 (plaintiffs adequately pleaded that
defendant was an employer where defendant “dispatched the
Plaintiffs to deliver customer orders, and scheduled them to
distribute flyers”).

Defendants’ motion to dismiss Chai is

denied as well.
Plaintiffs have not, however, identified evidence from
which a reasonable juror could conclude that Xiang Keng Zhu
acted as Plaintiffs’ employer.

Plaintiffs point out that the Ke

Zhang liquor license is in Xiang’s name.

Xiang Dep. 9:16-20.

But a “liquor license alone does not create a triable issue
regarding [a defendant’s] operational control over” the
business.

Gao v. Umi Sushi, Inc., No. 18-CV-06439, 2020 WL

4505523, at *4 (S.D.N.Y. Aug. 5, 2020).

Xiang was a cook at T&T

and he testified that he did not interact with Plaintiffs when
they made deliveries for T&T.

Xiang Dep. 10:14-16, 14:16-19;

see also Chai Dep. 21:12-16 (testifying that “only” she would
call Plaintiffs).

There is no indication in the record that

Xiang exercised any control over, or input into, their
schedules.

Therefore, Defendants’ motion is granted as to Xiang

Keng Zhu and he is dismissed.
C.

FLSA Statute of Limitations
Defendants contend that any violation of the FLSA was

not “willful,” which limits the time period for liability.
18

The

FLSA “provides a two-year statute of limitations on actions to
enforce its provisions, ‘except that a cause of action arising
out of a willful violation may be commenced within three years
after the cause of action accrued.’”

Parada v. Banco Indus. de

Venezuela, C.A., 753 F.3d 62, 70 (2d Cir. 2014) (quoting
29 U.S.C. § 255(a)).

“Mere negligence is insufficient.”

Young

v. Cooper Cameron Corp., 586 F.3d 201, 207 (2d Cir. 2009)
(citing McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133
(1988)).

An employer willfully violates the FLSA when it

“either knew or showed reckless disregard for the matter of
whether its conduct was prohibited by the statute.”
486 U.S. at 133.

McLaughlin,

“Reckless disregard,” in turn, “involves

actual knowledge of a legal requirement, and deliberate
disregard of the risk that one is in violation.”

Damassia v.

Duane Reade, Inc., No. 04-CV-8819, 2005 WL 1214337, at *3 n.2
(S.D.N.Y. May 20, 2005).

Plaintiffs must therefore prove “more

than that [the] defendant ‘should have known’ it was violating
the law.”

Hart v. Rick's Cabaret Int'l, Inc., 967 F. Supp. 2d

901, 937-38 (S.D.N.Y. 2013) (quoting Damassia, 2005 WL 1214337,
at *3 n.2).
Plaintiffs have pointed to no evidence suggesting
willfulness.
subject.

Their Rule 56.1 statement is silent on the

Other than the presence of the wage-and-hour poster

that Tengyu testified he did not understand, there is simply no
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indication in the record that Defendants understood federal or
state labor laws.

E.g., Padilla v. Sheldon Rabin, 176 F. Supp.

3d 290, 304 (E.D.N.Y. 2016).

There is no evidence that

Defendants were previously investigated or sued for labor-law
violations.

See e.g., Brock, 840 F.2d at 1061–62 (finding

willfulness where employer was on notice of FLSA obligations
because of prior violations and investigation by the Department
of Labor).

The Rule 30(b)(6) witness for Ke Zhang — Tengyu —

testified that he had little to no knowledge of the labor laws.
Tengyu Dep. 35:3-36:14.

The most that can be inferred from this

record, then, is that any FLSA violation stemmed from the
Defendants’ ignorance of the law, not their reckless disregard
of it.

See e.g., Zubair v. EnTech Eng'g P.C., 900 F. Supp. 2d

355, 360 (S.D.N.Y. 2012) (“[D]efendants’ ignorance of the law
suggests that they did not ‘willfully’ disregard their statutory
obligations.”); Valle v. Gordon Chen's Kitchen LLC, 254 F. Supp.
3d 665, 678 (S.D.N.Y. 2017) (defendants were not “willful” where
their failure “stemmed from their ignorance of [notice]
provision, not from an intentional disregard of its
requirement”).

I grant summary judgment in favor of the

Defendants on the issue of willfulness.

A two-year statute of

limitations applies to Plaintiffs’ remaining FLSA claims against
Ke Zhang and Tengyu.

Damages occurring before that time,

therefore, are not recoverable.
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D.

Liquidated Damages
Defendants also seek summary judgment on Plaintiffs’

federal and state claims for liquidated damages.
§§ 216(b), 260; N.Y. Lab. Law § 663(1).

29 U.S.C.

An employer who

violates the overtime wage provisions is liable for “the payment
of wages lost and an additional equal amount as liquidated
damages.”

29 U.S.C. § 216(b).

A defendant need not pay

liquidated damages, however, if it demonstrates the affirmative
defense of “good faith.”

E.g., Hart, 967 F. Supp. 2d at 937-38.

The burden is on the defendant to establish that the affirmative
defense applies.

Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132,

142 (2d Cir. 1999).
To avoid liquidated damages based on good faith, “the
employer must take active steps to ascertain the dictates of the
[labor laws] and then act to comply with them.”

Id.

“While the

wording of the FLSA and NYLL liquidated damages provisions are
not identical, there are no meaningful differences.”

Rana v.

Islam, 887 F.3d 118, 123 (2d Cir. 2018).
“‘Good faith’ in this context requires more than
ignorance of the prevailing law or uncertainty about its
development.”

Reich v. S. New England Telecomms. Corp., 121

F.3d 58, 71 (2d Cir. 1997).

Defendants say they did not know

the law, but they point to no evidence that they made any effort
to learn it.

Cf. JianJing Lu, 2017 WL 3913285, at *4 (granting
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summary judgment in plaintiff’s favor on liquidated damages
where defendants “did not know about or do any research
regarding the various wage-and-hour laws to which they were
subject”).

Defendants’ motion for summary judgment on the

affirmative defense of “good faith” under the FLSA and NYLL is
denied.
Conclusion
Defendants’ motion for summary judgment is granted in
part and denied in part.
Zhu are dismissed.

Defendants Li Hui Zhu and Xiang Keng

Plaintiffs’ FLSA claims against T&T

restaurant and Wen Chai Zou are also dismissed.

_/s Eric Komitee____________
ERIC KOMITEE
United States District Judge
Dated:

March 31, 2021
Brooklyn, New York

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