Cabrera v. Tommy's Place et al
Filing
105
MEMORANDUM OF DECISION AND ORDER - Both parties motions for judgment as a matter of law are denied. The Plaintiffs 95 motion for judgment as a matter of law pursuant to Fed. R. Civ. P 50 on his pay stub claim is denied, and the Defendants 98 moti on for judgment as a matter of law pursuant to Fed. R. Civ. P 50 on the Plaintiffs spread of hours claim and liquidated damages is also denied. SEE ATTACHED DECISION for further details. It is So Ordered by Judge Arthur D. Spatt on 11/28/2016. (Coleman, Laurie)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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EFRAIN REYES CABRERA,
Plaintiff,
-againstTHOMAS SCHAFER, DREAM TEAM TAVERN CORP.,
d/b/a Tommy’s Place
MEMORANDUM OF
DECISION AND
ORDER
12-CV-6323 (ADS)(AKT)
Defendant(s).
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APPEARANCES:
Frank & Associates, P.C.
Attorneys for the Plaintiff
500 Bi-County Boulevard
Suite 112N
Farmingdale, NY 11735
By:
Neil Frank, Esq.,
Alyssa T Marino, Esq.,
Brian Bodansky, Esq.,
Patricia Lynne Boland, Esq., Of Counsel
Gruenberg Kelly Della
Co-Counsel for the Defendants
700 Koehler Avenue
Ronkonkoma, NY 11779
By:
Glenn E Auletta, Esq.,
Sean Patrick Kelly, Esq.,
Zachary M Beriloff, Esq., Of Counsel
SPATT, District Judge:
Following a jury trial, the Defendants Dream Team Tavern Corp. d/b/a Tommy’s Place
and Thomas Schafer (collectively, “the Defendants”), were found liable under the New York State
labor laws for failure to pay the Plaintiff Efrain Reyes Cabrera (the “Plaintiff”) wages for his
“spread of hours.” The jury found that the Defendants were not liable under Fair Labor Standards
Act, 29 U.S.C. 201, et seq. (the “FLSA”) and New York State labor laws for failing to pay the
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Plaintiff overtime or for failing to provide the Plaintiff with pay stubs. The Plaintiff now moves
for judgment as a matter of law pursuant to Federal Rule of Civil Procedure (FED. R. CIV. P.) 50
on his New York State law pay stub claim. The Defendant cross-moves for judgment as a matter
of law pursuant to FED. R. CIV. P. 50 on the New York State law spread of hours claim as well as
the liquidated damages on that claim. For the following reasons, both parties’ motions are denied.
I. BACKGROUND
A. The Relevant Procedural History
The Plaintiff commenced this action on December 12, 2012 by filing a complaint against
the Defendants alleging four claims under the FLSA, New York Labor Law (N.Y. LAB LAW) and
the New York State Department of Labor rules, codified as N.Y. COMP. CODES R. & REGS. tit. 12,
§ 146. The Defendants answered on February 13, 2013.
On April 7, 2014, the Plaintiff filed an amended complaint, alleging that the Defendants
violated the FLSA and N.Y. LAB LAW by failing to pay him overtime wages; they failed to provide
him with pay stubs in further violation of the N.Y. LAB LAW (the “pay stub claim”); and they
violated the NYS Department of Labor rules by failing to pay him for his spread of hours as
required by N.Y. COMP. CODES R. & REGS. tit. 12, § 146–1.6(a) (the “spread of hours claim”).
A jury trial was conducted over the course of three days from April 25, 2016 through May
2, 2016. The jury found the Defendants liable for the spread of hours claim. The Plaintiff was
awarded $746.25 in damages, and because the jury found that the Defendants’ violation of the law
was willful, the damages were doubled, amounting to total damages of $1,492.50. The jury found
that the Defendants were not liable for the FLSA and NY Labor Law overtime claims, or for the
pay stub claim.
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On June 6, 2016, the Plaintiff filed a motion under FED. R. CIV. P. 50 for judgment as a
matter of law on his N.Y. LAB LAW pay stub claim. The Defendants filed their response on June
20, 2016 and they cross-moved under FED. R. CIV. P. 50 for judgment as a matter of law on the
Plaintiff’s spread of hours claim, and on the jury’s granting of liquidated damages.
B. The Relevant Facts
The trial record was divided into two sets of pages each beginning on page one: the record
from April 26, 2016 through April 27, 2016 (“1R.”), and the record for May 2, 2016 (“2R.”).
The Plaintiff was employed by the Defendants as a cook at Tommy’s Place from March
2005 until November 4, 2012. (1R. at 40–41). Once a week, the Plaintiff was paid in cash which
was delivered to him in an envelope with his name on it. (Id. at 41). The envelope did not contain
any paperwork or pay stubs, and he was never provided with any paperwork or pay stubs. (Id. at
41–42).
During the trial, Defendants introduced some of the Plaintiff’s time cards as evidence. (Id.
at 70–89). The Defendant Schafer testified that many records, including some time cards, were
lost in Hurricane Sandy. (Id. at 140). The Defendant Schafer testified that a number of the time
cards entered into evidence showed that the Plaintiff worked more than ten hours. (Id. at 121–23).
The Defendant Schaefer testified that he believed that he did not need to provide the
Plaintiff with pay stubs. He stated: “It’s my belief that when someone’s paid in full, I’m not
required to give a statement for hours. And they [including the Plaintiff] were paid in full.”
(Id. at 126). The Defendant Schaefer further testified:
Q: And so did you have any reason to doubt the information being provided to you
by Cindy in the calculator run that was generated from [the time cards]?
A: No.
Q: Because you have that information, what did that tell you, if anything, about the
need for a for a paycheck stub?
A: That it was not required.
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(Id. at 150–51).
In their closing arguments, the Defendants admitted that the Plaintiff proved by a
preponderance of the evidence that the Defendants did not provide him with weekly pay stubs.
(Id. at 57).
II. DISCUSSION
A. The Legal Standard
In order to disturb a jury’s verdict, the Court must find that “a reasonable jury would not
have a legally sufficient evidentiary basis to find . . . on that issue.” FED. R. CIV. P. 50(a)(1). The
Plaintiff never moved for judgment as a matter of law during the trial. The Defendants did move
for judgment as a matter of law during the trial, but by their own admission their instant motion
operates under a different theory. Since neither party moved for judgment as a matter of law during
trial on the theory on which they now proceed, and both now move for judgment as a matter of
law under Fed. R. Civ. P. 50(b), “the standard for granting judgment as a matter of law is elevated,
and the motion may not properly be granted by the district court, or upheld on appeal, except to
prevent manifest injustice.” ING Glob. v. United Parcel Serv. Oasis Supply Corp., 757 F.3d 92,
97 (2d Cir. 2014) (citing Lore v City of Syracuse, 670 F.3d 127, 153 (2d Cir. 2012)). Manifest
injustice exists when a jury’s verdict is wholly without legal support. Id.; Rothstein v. Carriere,
373 F.3d 275, 291 (2d Cir. 2004); Pahuta v. Massey–Ferguson, Inc., 170 F.3d 125, 129 (2d
Cir. 1999).
B. As to whether the Jury’s Verdict on the Pay Stub Claim was Manifestly Unjust
The Plaintiff argues that the jury’s verdict on the pay stub claim is manifestly unjust
because the jury could not have found that the Defendants either believed that they paid the
Plaintiff in full or that they believed in good faith that they did not have to provide him with weekly
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pay stubs if the jury also found that the Defendants owed money and willfully violated the law.
The Defendants contend, in opposition, that the willfulness finding only related to the spread of
hours claim, and not to the pay stub claim.
The Court agrees with the Defendants that there was legal support for the jury to find that
the Defendants were not liable on the pay stub claim.
The New York Labor Law states that an employer:
shall . . . establish . . . contemporaneous, true, and accurate payroll records
showing for each week worked the hours worked; the rate or rates of pay and basis
thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or
other; gross wages; deductions; allowances, if any, claimed as part of the minimum
wage; and net wages for each employee. For all employees who are not exempt
from overtime compensation . . . the payroll records shall include the regular hourly
rate or rates of pay, the overtime rate or rates of pay, the number of regular hours
worked, and the number of overtime hours worked.
N.Y. LAB. LAW at 195-3.
Section 198–1–d states that “If any employee is not provided . . . statements as required by
[195–3], he [] [] shall recover in a civil action damages of two hundred fifty dollars for each work
day that the violations occurred or continue to occur, but not to exceed a total of five thousand
dollars . . . .”
The Court instructed the jury on this cause of action and the Defendants’ possible
affirmative defenses as follows:
Finally, in the plaintiff's fourth claim he asserts that the defendant violated
the notice and record-keeping requirements of the New York Labor Law. On April
9, 2011 the New York legislature passed a law requiring an employer to provide
each employee with a “wage statement”, which I will call a pay stub, with every
payment of wages. So, to establish liability with regard to the pay stubs, the plaintiff
is required to prove by a preponderance of the evidence that after July -- withdrawn
-- that after April 9, 2011, the defendant did not provide him with a pay stub for
every week that he earned wages.
Now the damages with respect to this particular alleged violation are limited
to $250 for every occasion that the plaintiff was provided with wages, but not with
an appropriate pay stub up to a maximum of $5,000. Again, the damages with
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respect to this particular alleged violation involving the pay stubs are limited to
$250 for each occasion that the plaintiff was provided with wages, but not with an
appropriate pay stub up to a maximum of $5,000. I'm just going to finish this
particular phrase and then you’re going to have lunch.
However, New York law provides that the employer may assert two
affirmative defenses for failing to provide a wage payment statement for every
payment of wages. These affirmative defenses are as follows. First[,] [t]he
defendants may assert that they made complete and timely wages, payment of
wages to the plaintiff. They made complete and timely payment of wages to the
plaintiff. Second[,] [t]hey may assert that they reasonably believed in good faith
that they were not required to provide the employee with notice and wage
statements described above. If you find that the defendants established either of
these two affirmative defenses by a preponderance of the evidence, then you cannot
find the defendants liable for this claim of failure to provide adequate notice. And
those are two affirmative defenses.
(2R. at 105–06).
The jury found that the Plaintiff failed to establish, by a preponderance of the evidence,
that the Defendants “violated the New York Labor Law by failing to provide him with a pay stub
during anytime after April 9, 2011 . . . .” (Id. at 127). As stated above, the Court charged the jury
on two affirmative defenses on the pay stub claim: that they made full payment to the Plaintiff, or
a good faith belief that they did not have to provide pay stubs to the Plaintiff. The jury did not
state, nor did they have to, which of the affirmative defenses, if any, they found applied to the
Defendant.
While the Plaintiff is correct that it might have been illogical for the jury to find that the
Plaintiff was not paid in full and then find that the affirmative defense of paying someone in full
applied to the Defendants, that was not the only affirmative defense available to the Defendants.
The Defendant Schafer testified that he believed that he did not have to provide the Plaintiff with
pay stubs. (1R. at 126, 150–51). The jury could have reasonably believed that the Defendants
believed in good faith that they did not have to provide the Plaintiff with pay stubs. The jury
apparently believed the Defendant Schafer, and, of course, credibility is solely the province of the
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jury. “Credibility determinations, the weighing of the evidence, and the drawing of legitimate
inferences from the facts are jury functions, not those of a judge.” Mickle v. Morin, 297 F.3d 114,
120 (2d Cir. 2002) (quoting Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 150, 120
S. Ct. 2097, 2110, 147 L. Ed. 2d 105 (2000) (internal quotation marks omitted) (quoting Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 2513, 91 L. Ed. 2d 202 (1986))).
The Plaintiff’s position is not supported by the record. The Court charged the jury on
willfulness only in regard to the spread of hour wages and failure to pay overtime. As the Court
said, “I'm now going to instruct you on the law of two elements, willfulness and good faith. I will
now instruct you on these two additional legal elements that you must make with respect to the
defendants, if you find them liable for failure to pay overtime and spread of hour wages.” (Id. at
108).
The Court again specifically stated later, “In addition, you will make two factual
determinations that eventually will involve damages. First, did the plaintiff establish by a
preponderance of the evidence that the defendants acted willfully in failing to pay the plaintiff
overtime and spread of hours wages. And two, did the defendants establish by a preponderance of
the evidence that they acted in good faith and with objectively reasonable grounds in failing to pay
the plaintiff overtime and spread of hours wages. You will make one of those two determinations.”
(Id. at 112).
The fact that the jury found that the Defendants violation of the spread of hours law was
willful does not in turn also mean that they had to find that the Defendants willfully violated the
pay stub law. The Court never charged the jury on willfulness regarding the Defendants’ failure
to provide the Plaintiff with pay stubs, and therefore they were not even asked to consider whether
the Defendants’ failure to do so was willful.
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Therefore, as the jury could have found that the Defendants believed in good faith that they
did not have to provide the Plaintiff with pay stubs, the Court finds that the jury’s verdict as to the
pay stub count was not manifestly unjust and denies the Plaintiff’s motion for judgment as a matter
of law pursuant to FED. R. CIV. P. 50 on the pay stub count.
C. As to whether the Jury’s Verdict on the Spread of Hours Claim was Manifestly Unjust
The Defendants argue that the jury’s verdict on the spread of hours claim was manifestly
unjust because the Plaintiff failed to meet his prima facie burden, and that the jury’s verdict was
merely speculation. In opposition, the Plaintiff contends that he did meet his prima facie burden.
The Court agrees with the Plaintiff.
New York law requires that “[o]n each day on which the spread of hours exceeds 10, an
employee shall receive one additional hour of pay at the basic minimum hourly rate.” N.Y. COMP.
CODES R. & REGS. tit. 12, § 146-1.6 (a) (2011). The statute defines the spread of hours as “the
length of the interval between the beginning and end of an employee’s workday,” including breaks.
Id.
The Defendants introduced some the Plaintiff’s time cards into evidence, and the
Defendant Schafer testified that several of them illustrated that the Plaintiff worked more than ten
hours. (1R. at 121–23). Although the Plaintiff did not present evidence that the Plaintiff worked
more than ten hours a day every day, as the Court instructed the jury, “[t]he plaintiff can prove the
hours and weeks he worked by a just and reasonable inference. [] [T]here need not be precise or
documented proof of the hours he worked . . . .” (2R. at 104). The jury awarded the Plaintiff
$746.75. (Id. at 128). Since the Plaintiff was owed $7.25 for every hour that he worked beyond
ten hours, that means that the jury found that the Plaintiff was owed payment for approximately
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103 hours of work, which roughly translates to one hour per week during the period between
January 1, 2011 and December 21, 2012.
An approximation of damages is permitted where the employer fails to maintain accurate
time records to dispute Plaintiff's properly pled allegations. See, e.g., Najnin v. Dollar Mountain,
Inc., No. 14–CV–5758, 2015 WL 6125436, at *1 (S.D.N.Y. Sept. 25, 2015) (holding that a court
may enter judgment for plaintiff even where the result is approximate where the employer fails to
proffer evidence to dispute the employee's figures); Daniels v. 171 O Realty LLC, No. 10 Civ. 22,
2011 WL 3648245, at *4 (E.D.N.Y. Aug. 17, 2011) (holding that a court may award damages
based on an approximation of the employee’s loss).
Here, the Defendants did not keep records of when their employees took breaks (1R. at
134–37, 161–62); they discarded the weekly calculations of the hours their employees worked (Id.
at 124); and many records were destroyed. (Id. at 140). It is the employer’s duty to maintain
records of employee hours. See Gunawan v. Sake Sushi Rest., 897 F. Supp. 2d 76, 84 (E.D.N.Y.
2012) (“If an employer fails to keep the required records, the plaintiff may meet this burden if he
proves that he has in fact performed work for which he was improperly compensated and if he
produces sufficient evidence to show the amount and extent of that work as a matter of just and
reasonable inference”) (quoting Reich v. S. New England Telecommunications Corp., 121 F.3d 58,
66 (2d Cir. 1997) (quoting Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687–88, 66 S. Ct.
1187, 1192–93, 90 L. Ed. 1515 (1946))); Doo Nam Yang v. ACBL Corp., 427 F. Supp. 2d 327, 335
(S.D.N.Y. 2005); see also N.Y. LAB. LAW § 196–a(a).
In the Court’s view, there was sufficient evidence before the jury for it to find that the
Defendants violated the New York State Department of Labor laws by failing to pay him spread
of hours wages. Therefore, the Court finds that the jury’s verdict was not wholly without legal
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support, and denies the Defendants’ motion for judgment as a matter of law as to the spread of
hours claim.
D. As to whether the Jury’s Willfulness Finding Was Manifestly Unjust
The Defendants further argue that the jury’s finding of liquidated damages was improper
because the jury should not have been able to find that the Defendants willfully failed to pay the
Plaintiff his spread of hours. The Defendants contend they jury could not have possibly found that
the Defendants’ violation was willful because there was no evidence that the Defendants knew that
they had to pay their employees spread of hours. The Plaintiff contends that this “requires little
response,” and has not responded in any meaningful way. Although the Court disagrees with the
Plaintiff’s statement, the Court finds that the jury’s verdict was not without legal support.
The Plaintiff did not have to prove, by a preponderance of the evidence, that the Defendants
knew that they had to pay the Plaintiff for his spread of hours. They could have found that they
recklessly disregarded the spread of hours requirement. As the Court charged the jury,
if you find them liable for failure to pay overtime and spread of hour wages . . . then
you must decide whether the plaintiff has proven by a preponderance of the
evidence that the defendants acted ‘willfully’ in the failure to pay the overtime and
spread of hours wages as required by the law. What does that mean? I[f] the
defendants knew or showed reckless disregard for that fact that [their] conduct was
prohibited, then [their] conduct was willful.
(2R. at 108).
The trial record is devoid of any evidence that the Defendants undertook any effort to
discern their obligations under the New York Labor Law regarding spread of hours. Furthermore,
the evidence adduced at the trial showed that there was no way for the Defendants’ employees to
log their breaks—so there would be no way for the Defendants to calculate the spread of hours.
(1R. at 134–37, 161–62). The Defendants were missing many of the Plaintiff’s time cards, though
they claim that many were lost in Sandy. (Id. at 140). Also, the “calculator tape” which showed
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how much the Defendants employees were supposed to be paid each week was thrown out after
the calculations were made. (Id. at 124). These facts taken together are sufficient for the jury to
have found that the Defendants recklessly disregarded the spread of hours requirement. See, e.g.,
Hernandez v. Jrpac Inc., No. 14–CV–4176, 2016 WL 3248493, at *18 (S.D.N.Y. June 9, 2016)
(“To be sure, defendants’ wholesale failure to maintain records of the hours worked by plaintiffs
may be argued to indicate reckless disregard of their legal obligations with respect to employee
pay.”); Galeana v. Lemongrass on Broadway Corp., 120 F. Supp. 3d 306, 315 (S.D.N.Y. 2014)
(finding willfulness where the Defendants disregarded and evaded recordkeeping requirements);
Yang v. ACBL Corp., 427 F. Supp. 2d 327, 337–38 (S.D.N.Y. 2005) (noting that defendant’s
knowing failure to pay appropriate overtime demonstrated willfulness); Moon v. Kwon, 248
F. Supp. 2d 201, 231 (S.D.N.Y. 2002) (finding that defendant’s knowing violations of FLSA and
NYLL recordkeeping requirements amounted to willfulness).
Therefore, the jury’s finding that the Defendants willfully failed to pay the Plaintiff his
spread of hour wages was not wholly without legal support. Accordingly, the Court denies the
Defendants’ motion for a judgment as a matter of law on the issue of liquidated damages.
III. CONCLUSION
Both parties’ motions for judgment as a matter of law are denied. The Plaintiff’s motion
for judgment as a matter of law pursuant to Fed. R. Civ. P 50 on his pay stub claim is denied, and
the Defendants’ motion for judgment as a matter of law pursuant to Fed. R. Civ. P 50 on the
Plaintiff’s spread of hours claim and liquidated damages is also denied.
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It is SO ORDERED:
Dated: Central Islip, New York
November 28, 2016
_______/s/ Arthur D. Spatt_______
ARTHUR D. SPATT
United States District Judge
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