Hernandez et al v. The Fresh Diet Inc. et al

Filing 401

ORDER: For the reasons fully discussed herein, the Court awards Plaintiffs' liquidated damages. The Parties' are hereby ORDERED to submit to the Court on or before April 10, 2020, letter briefs constituting their positions on pre-judgment interest and addressing the amount of liquidated damages owed to Theresa Jackson under the FLSA. (As further set forth in this Order.) (Signed by Judge Andrew L. Carter, Jr on 3/13/2020) (cf)

USDCSDNY
DOCUMENT
ELECTRONICALLY FILED
DOC#: ---�-,--;�-DATE FILED: 31 I 1/JD79

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
FERNANDO HERNANDEZ, BRYANT
WHITE, CECILIA JACKSON, and TERESA
JACKSON,
Plaintiffs,

1: 12-cv-04339 (ALC)
ORDER

-againstJUDAH SCHLOSS and ZALMI DUCHMAN,
Defendants.

ANDREW L. CARTER, JR., United States District Judge:

Plaintiffs Fernando Hernandez, Bryant White, Cecilia Jackson and Teresa Jackson
(collectively, the "Plaintiffs") brought this action against corporate Defendants The Fresh Diet
Inc., Late Night Express Courier Services, Inc. (FL), and the Fresh Diet-NY In. (NY), and
individual Defendants Syed Hussain, Judah Schloss and Zalmi Duchman for failure to pay
overtime wages pursuant to the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216(b), and the
New York Labor Laws ("NYLL"), N.Y.L.L. § 19 8 ( 1-a) . ECF No. 1. A jury trial in this action
was held from October 29, 2018 to November 5, 2018, which concluded with a verdict against
Defendants Zalmi Duchman and Judah Schloss (collectively, the "Defendants"). The jury
determined that Defendants were Plaintiffs' employers and accordingly, Plaintiffs were entitled
to unpaid overtime compensation. Because the Parties' failed to adequately address the issue of
liquidated damages, the Court held a bench trial on July 25, 2019 on this specific issue. This
opinion constitutes the Court's findings of fact and conclusions of law after trial pursuant to Fed.
R. Civ. P. 52(a).
BACKGROUND

The Comi assumes familiarity with the facts alleged in the pleadings, which were

described in detail in the Court's Opinion & Order Denying Defendants' and Plaintiffs' Motions
for Summary Judgement. See Opinion and Order, ECF No. 163; see also Order, ECF No. 386.
Facts relevant to the bench trial are restated here.

I.

Procedural Posture
From October 29, 2018 to November 5, 2018, the Court held a jury trial to determine

whether Plaintiffs were entitled to overtime compensation. The jury returned a verdict in favor of
Plaintiffs, finding that Defendants were Plaintiffs' employers under the FLSA and NYLL and
accordingly awarded Plaintiffs the following damages:

Plaintiff

FLSA

NYLL

Fernando Hernandez

$0

$0

Bryant White

$0

$50,616.00

Cecilia Jackson

$0

$25,908.00

Teresa Jackson

$7,535.52

$65,468.08

Jury Verdict, ECF No. 352. Following the trial, Defendants filed a Motion for Judgment as a
Matter of Law and for a New Trial and Plaintiffs filed a Cross Motion for Entry of Judgment
with Liquidated Damages and Pre-Judgment Interest. On March 20, 2019, the Court denied in
part and granted in part, Defendants' motion, stating Plaintiffs damages should be as follows:

Plaintiff

FLSA

NYLL

Bryant White

$0

$18,125.00

Cecilia Jackson

$0

$7,250.00

Teresa Jackson

$7,535.52

$14,500.00

Order, ECF No. 386 at 9. The Court additionally, denied Plaintiffs' cross motion and indicated it
would take up the issue of pre-judgment interest once the issue of liquidated damages had been
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resolved. Id. at 12. On May 6, 2019, Plaintiffs consented to the Court's remittitur of damages and
requested a bench trial on liquidated damages. Letter dated May 6, 2019, ECF No. 387. The
Cami subsequently held a bench trial on July 25, 2019. Direct examination was conducted and
submitted via affidavit, see Duchman Deel., ECF No. 395; Schloss Deel., ECF No. 96, whereas
cross-examination occurred at the bench trial.
II.

Defendants

Defendant Zalmi Duchman was CEO of the Company from 2006 to 2013 and then
chairman of the board from 2013 to 2014. Bench Trial Tr. at 16:1-16:3, 16:10-17, ECF No. 399
[hereinafter Tr.]. When the Company first stmied in 2006, Duchman understood the drivers to be
independent contractors based upon limited online research, industry standards and the flexible
nature of the drivers' work-namely the drivers' ability to control their schedules, work for other
companies while making deliveries for the Company, substitute their deliveries with other
drivers and use their own vehicles. Id. at 4:12-4:19; see also Duchman Deel.� 4. Around this
time, Duchman had a brief discussion with the Company's accountant, Isaac Salver, who
confirmed his understanding that the drivers were independent contractors. Id. at 3:9-3:22, 4:34:9; see also Duchman Deel.�� 1, 3. Outside of his conversation with the accountant, at the
bench trial, Duchman did not recall discussing the drivers' classification with anyone else in
2006. Tr. at 4:25-5:3.
A few years later, between 2008 and 2010, Duchman briefly spoke with the Company's
outside counsel, David Willig concerning the drivers being classified as independent contractors.
Tr. at 3:23-4:2, 5:10-5:25; see also Duchman Deel.� 1. This discussion took place in the context
of a meeting involving another executive and the accountant. Tr. 11:10-12:15. Duchman did not
ask outside counsel to evaluate the drivers' classification under wage-and-hour law, nor did he

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independent contractors. See Valle, 254 F. Supp. 3d at 678 (finding the Defendants did not
intentionally disregard the NYLL where they consulted with attorneys).
Accordingly, Plaintiffs are each awarded liquidated damages under the NYLL for
violations beginning on November 24, 2009. Because the New York Legislature raised the
amount ofliquidated damages from twenty-five percent to one hundred present effective April 9,
2011, Plaintiffs are entitled to liquidated damages equal to twenty-five percent ofunpaid
overtime work for NYLL violations occurring between November 24, 2009 and April 9, 2011
and one hundred percent ofunpaid overtime work performed thereafter. See Valle, 254 F. Supp.
3d at 678; w;caksono v. Xyz 48 Corp., 10 Civ. 3635 (S.D.N.Y. May. 2, 2011).2 Specifically,
under the NYLL Plaintiff Bryant White, who worked from approximately July 21, 2010 until
June 5, 2012, is entitled to $14,093.73; Cecilia Jackson, who worked from October 2, 2009 to
September 14, 2010 is entitled to $1,812.50; and Theresa Jackson, who worked from August 21,
2009 until July 27, 2011, is entitled to $5,321.82. Additionally, as the only Plaintiff who
recovered damages under the FLSA, Theresa Jackson is entitled to liquidated damages under
said statute for any violations occun-ing before November 24, 2009. Because the Parties'
briefings do not address how many hours Theresa Jackson worked between August 21, 2009 and
November 24, 2009, at this time, the Court is unable to calculate the amount ofliquidated
damages owed to her under the FLSA.

Because, as explained above, the NYLL's liquidated damages provision was no longer punitive once the
November 24, 2009 amendment was in effect, Plaintiffs may not recover damages under both the NYLL and the
FLSA for violations incurred on or after November 24, 2009. Rana, 887 F.3d at 122-23.
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CONCLUSION

For the reasons fully discussed herein, the Court awards Plaintiffs' liquidated damages.
The Parties' are hereby ORDERED to submit to the Court on or before April 10, 2020, letter
briefs constituting their positions on pre-judgment interest and addressing the amount of
liquidated damages owed to Theresa Jackson under the FLSA.
Dated:

March 13, 2020
New York, New York

�.Ci:E�'J--United States District Judge

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