Inclan et al v. New York Hospitality Group, Inc. et al

Filing 101

MEMORANDUM AND ORDER. For the reasons in this Memorandum and Order, plaintiffs' motion for partial summary judgment (Doc. 80) is granted in part and denied in part, and the Moving Defendants' motion for summary judgment (Doc. 85) is granted in part and denied in part, and as further specified herein. Counsel are directed to appear for a conference before the Court on April 16, 2015, at 2:30 p.m., to discuss the resolution of this case by settlement or trial. IT IS SO ORDERED. Granting in part and denying in part 80 Motion for Summary Judgment; Granting in part and denying in part 85 Motion for Summary Judgment. (Signed by Judge Naomi Reice Buchwald on 3/26/2015) Copies Mailed By Chambers. (rjm)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-----------------------------------X
LUIS INCLAN, IVAN KRAUCHANKA,
SZILVIA REP, MAME FATOU WADE, and
SKANDER SOLTANI, on behalf of
themselves, FLSA Collective
Plaintiffs and the Class,

MEMORANDUM AND ORDER
12 Civ. 4498 (NRB)

Plaintiffs,
- against NEW YORK HOSPITALITY GROUP, INC.,
RAJMAR HOLDINGS, INC. and RAJU S.
MIRCHANDANI,
Defendants.
-----------------------------------X
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE

Before the Court are cross-motions for summary judgment in
a collective action brought under the Fair Labor Standards Act
of 1938, as amended, 29 U.S.C. § 201, et seq. (“FLSA”), also
involving
(“NYLL”).

supplemental

claims

under

the

New

York

Labor

Law

Plaintiffs, who are former waiters at a Manhattan

restaurant called “Le Bateau Ivre,” operated by defendant New
York Hospitality Group, Inc. (“NYHG”), move for partial summary
judgment, asking the Court to rule:

(1) that defendants are

liable under the FLSA and the NYLL for unpaid minimum wages due
to defendants’ failure to meet the requirements for claiming tip
credit

allowances

under

the

FLSA

and

the

NYLL;

(2)

that

defendants are liable under the FLSA and the NYLL for unpaid
overtime wages; (3) that defendants are liable under the Wage

Theft Prevention Act (an amendment to the NYLL) for statutory
damages for their failure to provide proper wage notices and
wage statements; (4) that defendants are liable under the NYLL
for

unpaid

spread-of-hours

payments;

(5)

that

defendants

are

liable under the FLSA and the NYLL for liquidated damages; (6)
that plaintiffs are entitled to the benefit of a three-year
limitations
defendants

period
Raju

S.

for

their

Mirchandani

FLSA

claims;

and

NYHG

and

are

(7)

jointly

that
and

severally liable under the FLSA and the NYLL as joint employers
of

plaintiffs.

Mirchandani

and

In

their

defendant

cross-motion
Rajmar

for

summary

Holdings,

Inc.

judgment,
(“RHI”;

collectively, the “Moving Defendants”) ask the Court to rule
that they are not liable as employers under the FLSA and the
NYLL and to dismiss them from the case.

For the reasons stated

herein, plaintiffs’ motion is granted in part and denied in
part, and the Moving Defendants’ motion is granted in part and
denied in part.

2

I. BACKGROUND1
The following facts are undisputed except as noted.2
relevant

times,

Manhattan
Compl.

Le

restaurant

¶ 6;

Pls.’

Bateau
in

Ivre

the

56.1

(or

style

Stmt.

of

the
a

¶ 30;

“Restaurant”)
French

bistro.

Deposition

of

At all
was

a

Am.
Raju

Mirchandani at 9:19-21 (“Mirchandani Dep.”), Bellovin Aff. Ex.
1

Citations to the record refer to the First Amended Class and Collective
Action Complaint, dated November 13, 2012 (“Amended Complaint” or “Am.
Compl.”); plaintiffs’ memorandum of law in support of plaintiffs’ motion,
dated July 28, 2014 (“Pls.’ Mem.”); plaintiffs’ Local Rule 56.1(a) statement
of material facts, dated July 28, 2014 (“Pls.’ 56.1 Stmt.”); the declaration
of C.K. Lee, Esq., dated July 28, 2014 (“Lee Decl.”), and exhibits thereto;
defendants’ memorandum of law in opposition to plaintiffs’ motion, dated
August 15, 2014 (“Defs.’ Opp. Mem.”); defendants’ Local Rule 56.1(b)
counterstatement of material facts, dated August 15, 2014 (“Defs.’ 56.1
Counterstmt.”); the affirmation of Marshall B. Bellovin, Esq., dated August
15, 2014 (“Bellovin Aff.”), and exhibits thereto; plaintiffs’ reply
memorandum of law in support of plaintiffs’ motion, dated August 22, 2014
(“Pls.’ Reply Mem.”); the Moving Defendants’ memorandum of law in support of
the Moving Defendants’ motion, dated July 28, 2014 (“Defs.’ Mem.”);
defendants’ Local Rule 56.1(a) statement of material facts, dated July 28,
2014 (“Defs.’ 56.1 Stmt.”); plaintiffs’ memorandum of law in opposition to
the Moving Defendants’ motion, dated August 15, 2014 (“Pls.’ Opp. Mem.”);
plaintiffs’ Local Rule 56.1(b) counterstatement of material facts, dated
August 15, 2014 (“Pls.’ 56.1 Counterstmt.”); and the Moving Defendants’ reply
memorandum of law in support of the Moving Defendants’ motion, dated August
29, 2014 (“Defs.’ Reply Mem.”), and other documents filed in this case by
number (“Doc. __”).
2
Both sides do not comply with summary judgment procedure by responding
to their adversary’s Rule 56.1(a) statements of material facts with
counterstatements in which they purport to lack sufficient knowledge to admit
or dispute some of those facts.
See, e.g., Pls.’ 56.1 Counterstmt. ¶ 21
(“Plaintiffs do not possess knowledge or information sufficient to form a
belief as to the truth or falsity of the facts set forth in ¶ 21 of
Defendants’ Rule 56.1 Statement”); Defs.’ 56.1 Counterstmt. ¶ 4 (“Defendants
do not have the requisite knowledge to admit or dispute the accuracy of Par.
# 4.”). Such denials of knowledge or information sufficient to form a belief
are inadequate at the summary judgment stage to “rebut a fact submitted as
undisputed by a moving party.” Whitehurst v. 230 Fifth, Inc., 998 F. Supp.
2d 233, 248 (S.D.N.Y. 2014); see, e.g., Cooper v. City of New Rochelle, 925
F. Supp. 2d 588, 605 (S.D.N.Y. 2013).
Consistent with this principle, our
local rule provides that “[e]ach numbered paragraph in the [moving party’s]
statement of material facts . . . will be deemed to be admitted for the
purposes of the motion unless specifically controverted by a correspondingly
numbered paragraph in the [opposing party’s] statement.”
Local Civ. Rule
56.1(c). Accordingly, we deem the uncontroverted assertions contained in the
moving parties’ Rule 56.1 statements, where supported by evidence (or, as
appropriate, an absence of evidence), to be admitted.

3

C.

The five plaintiffs (Luis Inclan, Ivan Krauchanka, Szilvia

Rep, Mame Fatou Wade, and Skander Solanti) were employees at the
Restaurant, where they worked as waiters and two of them also
worked as bartenders.

Pls.’ 56.1 Stmt. ¶¶ 1, 5, 9, 13, 17.

Plaintiffs’ dates of employment at the Restaurant varied but
overlapped; the first plaintiff (Wade) was hired in March 2005,
and the last one (Soltani) left the Restaurant in June 2012.
Pls.’ 56.1 Stmt. ¶¶ 13, 17; Defs.’ 56.1 Stmt. ¶¶ 16, 17.
Throughout

their

employment

at

the

Restaurant,

the

plaintiffs were paid at what the parties call a “tip credit
minimum wage rate,” which was $5.00 per hour at the dates of
their termination.

Pls.’ 56.1 Stmt. ¶¶ 3, 7, 11, 15, 19.

other

plaintiff

words,

each

was

paid

the

prevailing

In

hourly

minimum wage, minus an allowance permitted by law (under some
circumstances) for employees who customarily receive tips.

See

Pls.’ 56.1 Stmt. ¶ 3; Pls.’ Mem. at 1; Defs.’ Opp. Mem. at 2.
However, plaintiffs did not receive a notice of the Restaurant’s
intent to take a tip credit, nor did they receive a wage notice
form from the Restaurant.

Pls.’ 56.1 Stmt. ¶¶ 4, 8, 12, 16, 20,

23, 24.
From time to time, plaintiffs worked more than forty hours
per week.

On at least some of those occasions, the Restaurant

did not fully compensate them (even assuming a tip credit were
allowed) for their overtime hours, which would have required

4

multiplying the general minimum wage rate by one and one-half
and then subtracting the amount of the permissible tip credit.
Pls.’

56.1

Stmt.

¶ 27;

see

Defs.’

56.1

Counterstmt.

¶ 27.

Additionally, plaintiffs sometimes worked more than ten hours
per day.

On those occasions, the Restaurant did not pay them an

additional

hour’s

wage

for

required by New York law.
The

Restaurant

was

their

“spread

of

hours,”

operated

by

defendant

Stmt. ¶ 30; Defs.’ 56.1 Stmt. ¶¶ 21, 22.
sole

owner

of

was

Pls.’ 56.1 Stmt. ¶ 28.

corporation wholly owned by defendant Mirchandani.

the

as

defendant

RHI,

a

NYHG,

a

Pls.’ 56.1

Mirchandani was also

separate

entity

with

no

relation to the Restaurant and with no employees in common with
NYHG.

Defs.’ 56.1 ¶ 23, 24.

Restaurant’s

affairs

was

Mirchandani’s involvement in the

substantial,

although

vigorously contest the degree of this involvement.

the

parties

As discussed

in greater detail in Part II.H below, Mirchandani signed the
lease

and

contracts

on

the

Restaurant’s

behalf,

hired

the

Restaurant’s managers and chef, met with the managers weekly to
discuss the Restaurant’s business, and set employees’ pay rates.
Mirchandani Dep. 9:11-18, 10:17-19, 11:2-10, 21:11-1828:7-29:6.
The initial complaint in this action was filed on June 8,
2012,

and

the

Amended

Complaint

(which

complaint), was filed on November 13, 2012.

is

the

operative

Docs. 1, 15.

The

action was certified as an FLSA collective action on April 2,

5

Doc. 26.3

2013.

Following discovery, plaintiffs and the Moving

Defendants filed the instant cross-motions for summary judgment
on July 28, 2014.

The motions were fully briefed on August 29,

2014.

II.

DISCUSSION

Plaintiffs do not seek summary judgment on the amount of
damages, but only as to issues of liability that will structure
further

proceedings.

Similarly,

resolution

of

the

Moving

Defendants’ motion will decide which defendants remain in the
case

but

will

not

determine

the

amount

of

the

remaining

defendants’ liability.
In

Part

II.H

below,

we

explain

the

reasons

for

our

conclusion that Mirchandani will be held jointly and severally
liable with NYHG.

Throughout this discussion, we refer to the

“Restaurant’s” liability as shorthand for the joint and several
liability of those two defendants.

A.

Summary Judgment Standard
A motion for summary judgment is appropriately granted when

there is no genuine issue as to any material fact and the moving
party is entitled to judgment as a matter of law.

3

Fed. R. Civ.

Although the Amended Complaint includes both FLSA collective action and
class action allegations, see Am. Compl. ¶¶ 11-21, plaintiffs have never
pursued class certification pursuant to Fed. R. Civ. P. 23.

6

P. 56(a).

In this context, “[a] fact is ‘material’ when it

might affect the outcome of the suit under governing law,” and
“[a]n issue of fact is ‘genuine’ if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.”
McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 202 (2d Cir.
2007) (other internal quotation marks and citations omitted).
“In assessing the record to determine whether there is [such] a
genuine

issue

to

be

tried,

we

are

required

to

resolve

all

ambiguities and draw all permissible factual inferences in favor
of

the

party

against

whom

summary

judgment

is

sought.”

Gorzynski v. JetBlue Airways Corp., 596 F.3d 93, 101 (2d Cir.
2010) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986)).
On a motion for summary judgment, “[t]he moving party bears
the initial burden of demonstrating ‘the absence of a genuine
issue of material fact.’”

F.D.I.C. v. Great Am. Ins. Co., 607

F.3d 288, 292 (2d Cir. 2010) (quoting Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986)).
non-moving

party

“must

come

Where that burden is carried, the
forward

with

specific

evidence

demonstrating the existence of a genuine dispute of material
fact.”
party

Id. (citing Anderson, 477 U.S. at 249).
“must

do

more

than

simply

show

that

The non-moving
there

is

some

metaphysical doubt as to the material facts . . . and may not
rely on conclusory allegations or unsubstantiated speculation.”

7

Brown v. Eli Lilly & Co., 654 F.3d 347, 358 (2d Cir. 2011)
(internal quotation marks and citations omitted).

B.

Minimum Wage Claims
Both the FLSA and the NYLL permit an employer to pay a

tipped

worker

a

cash

wage

that

is

lower

than

the

statutory

minimum wage, provided that the cash wage and the employee’s
tips, taken together, are at least equivalent to the minimum
wage.

See 29 U.S.C. §§ 203(m), 206(a)(1); 12 N.Y.C.R.R. § 146-

1.3(b)

(effective

Jan.

1,

2011);

12

N.Y.C.R.R.

§ 137-1.5

(repealed effective Jan. 1, 2011);4 Shahriar v. Smith & Wollensky
Restaurant Grp., 659 F.3d 234, 239-40 (2d Cir. 2011).
allowance

against

the

minimum

cash

wage

is

known

as

This
a

“tip

credit.”
Plaintiffs contend that defendants paid them an hourly wage
that was below the generally permissible minimum wage, without
fulfilling federal and state law requirements to take a tip
credit allowance.
their

employment,

It is undisputed that at all times during
each

plaintiff

was

“paid

at

a

tip

credit

minimum wage rate, that is, minimum wage minus the applicable

4

On January 1, 2011, the New York Department of Labor replaced its
existing regulations of restaurant industry wages with the so-called
“Hospitality Wage Order.”
See Barenboim v. Starbucks Corp., 698 F.3d 104,
110 (2d Cir. 2012), certified questions answered, 21 N.Y.3d 460 (2013); Hicks
v. T.L. Cannon Corp., 35 F. Supp. 3d 329, 344 (W.D.N.Y. 2014). Because the
instant case involves claims that arose both before and after the Hospitality
Wage Order’s effective date, we cite both the current and the pre-2011
regulations.

8

tip credit allowance.”
15, 19.

Pls.’ 56.1 Stmt. ¶ 3; see id. ¶¶ 7, 11,

Thus, plaintiffs’ wages were impermissibly low unless

the Restaurant satisfied the requirements of the FLSA and NYLL
to claim a tip credit.

We consider the requirements of each of

those statutes in turn.

1.

FLSA

Under the FLSA, an employer may not claim a tip credit as
to an employee’s wages unless the employer has informed that
employee of the provisions of the section of the FLSA permitting
the tip credit.

29 U.S.C. § 203(m); see, e.g., Copantitla v.

Fiskardo Estiatorio, Inc., 788 F. Supp. 2d 253, 287 (S.D.N.Y.
2011); Chung v. New Silver Palace Rest., Inc., 246 F. Supp. 2d
220, 228-29 (S.D.N.Y. 2002).
construed

and

normally

“This notice provision is strictly

requires

that

an

employer

take

affirmative steps to inform affected employees of the employer’s
intent to claim the tip credit.” Perez v. Lorraine Enters.,
Inc., 769 F.3d 23, 27 (1st Cir. 2014); see, e.g., Kilgore v.
Outback Steakhouse of Fla., Inc., 160 F.3d 294, 298 (6th Cir.
1998); Reich v. Chez Robert, Inc., 28 F.3d 401, 404 (3d Cir.
1994); Hart v. Rick’s Cabaret Int’l, Inc., 967 F. Supp. 2d 901,
934 (S.D.N.Y. 2013); Lanzetta v. Florio’s Enters., Inc., 763 F.
Supp. 2d 615, 623 (S.D.N.Y. 2011).

9

The
satisfied

employer
the

“bear[s]

FLSA’s

the

notice

burden

of

showing

requirement

by,

that

for

[it]

example,

providing employees with a copy of § 203(m) and informing them
that their tips will be used as a credit against the minimum
wage as permitted by law.”

He v. Home on 8th Corp., No. 09 Civ.

5630, 2014 WL 3974670, at *5 (S.D.N.Y. Aug. 13, 2014) (internal
quotation marks omitted); see, e.g., Copantitla, 788 F. Supp. 2d
at 288.

“If the employer cannot show that it has informed

employees that tips are being credited against their wages, then
no tip credit can be taken and the employer is liable for the
full minimum-wage . . . .”

Chez Robert, 28 F.3d at 403.

Here, defendants point to no evidence that the Restaurant
complied

with

the

FLSA’s

tip

credit

notice

requirement.

Instead, defendants argue that the Court should “assume proper
tip credit notification was provided,” Defs.’ Mem. at 3, because
one of the Restaurant’s managers testified that she “d[id]n’t
recall”

whether

the

employees

were

Restaurant was taking a tip credit.

given

notice

that

the

Deposition of Adriana Daci

at 29:7-9 (“Daci Dep.”), Bellovin Aff. Ex. D; see, e.g., Defs.’
56.1 Counterstmt. ¶¶ 4, 8, 12, 16, 20, 23.

To make such an

assumption in defendants’ favor would be inconsistent with the
principle that on a motion for summary judgment, “where the
nonmoving party will bear the burden of proof on an issue at
trial, the moving party may satisfy its burden by pointing to an

10

absence

of

nonmoving

evidence

party’s

to

case.”

support

an

Crawford

essential
v.

element

Franklin

of

Credit

the

Mgmt.

Corp., 758 F.3d 473, 486 (2d Cir. 2014) (brackets and internal
quotation marks omitted).
burden

to

prove

Because the employer has the ultimate

compliance

with

the

tip

credit

notice

requirement, an employer opposing summary judgment on this issue
must “do more than point to a dearth of evidence.”
Enters., 769 F.3d at 30.

Lorraine

Instead, the employer must “adduce

definite competent evidence showing that waiters were informed
of the tip credit.”

Id.

As defendants here have not done so,

the Restaurant is liable under the FLSA for plaintiffs’ unpaid
minimum wages without a tip credit allowance.

2.

NYLL

The regulations implementing the NYLL also impose notice
requirements upon an employer that desires to take a tip credit.
See

12

N.Y.C.R.

N.Y.C.R.R.

§ 146-2.2

§ 137-2.2

(repealed

(effective
effective

Jan.
Jan.

1,
1,

2011);
2011).

12
In

addition to notice, state records also impose a recordkeeping
burden, by requiring that an employer “establish, maintain and
preserve for at least six years weekly payroll records” that
show the “tip credits, if any, claimed as part of the minimum
wage.”

12 N.Y.C.R.R. § 146-2.1(a)(9) (effective Jan. 1, 2011);

11

accord 12 12 N.Y.C.R.R. § 137-2.1(a)(7) (repealed effective Jan.
1, 2011).
Here, defendants “acknowledge and take responsibility for
their mistake in not providing the proper notification in not
providing the proper notification under the . . . NYLL.”
Opp. Mem. at 3.

Defs.’

Although defendants also summarily assert that

plaintiffs are not entitled to summary judgment on the NYLL
claim, see id., they offer no argument for declining to award on
this issue in light of their concession of fault.

Accordingly,

the Restaurant is liable under the NYLL for plaintiffs’ unpaid
minimum wages without a tip credit allowance.

C.

Overtime Claims
Plaintiffs contend defendants failed to pay them the proper

minimum

wage

for

their

overtime

hours.

Both

the

FLSA

and

regulations issued pursuant to the NYLL require an employer to
pay an overtime wage of one and one-half times the regular rate
for each hour worked in excess of forty per work week.

29

U.S.C. § 207(a)(1); 12 N.Y.C.R.R. § 146-1.4 (effective Jan. 1,
2011);

12

N.Y.C.R.R.

§ 137-1.3

(repealed

effective

Jan.

1,

2011).

For tipped employees, the minimum overtime cash wage is

the employee’s regular rate of pay before subtracting any tip
credit, multiplied by one and one-half, minus the tip credit.
See Copantitla, 788 F. Supp. 2d at 291-92 (citing 29 U.S.C.

12

§ 203(m);

29

C.F.R.

§ 146-1.4

(NYLL).

§§ 531.60,
Thus,

under

778.5)
both

(FLSA);
federal

12
and

N.Y.C.R.R.
state

law,

“[i]t is a violation of the overtime requirement for an employer
to subtract the tip credit first and then multiply the reduced
rate by one and one half.”

12 N.Y.C.R.R. § 146-1.4 (NYLL);

accord Copantitla, 788 F. Supp. 2d at 291 (FLSA).

Instead, a

lawful overtime wage for tipped employees paid the minimum tip
credit wage is calculated by multiplying the statutory minimum
wage by one and one half and then subtracting the tip credit.
Defendants “concede that there were occasional time periods
in which Plaintiffs [were not] adequately compensated for their
overtime hours worked.”
Counterstmt. ¶ 27.

Defs.’ Opp. Mem. at 3; see Defs.’ 56.1

Indeed, the evidence demonstrates that on

some occasions, the Restaurant paid an unlawfully low wage for
overtime hours.

On some of those occasions, wage statements in

the record show that the employee received straight pay (at a
rate lowered by the improper tip credit allowance) for hours
worked over forty per week.

For example, during the pay period

ending November 28, 2010, plaintiff Krauchanka worked forty-four
hours and was paid $4.65 for every one of those hours, including
the last four.

Lee Decl. Ex. 7, at P546.

Similarly, during

the pay period ending January 2, 2011, plaintiff Soltani worked
fifty-eight hours and was paid $4.65 for every one of those
hours, including the last eighteen.

13

Lee Decl. Ex. 7, at P633.

The record contains numerous other examples of straight pay for
overtime hours.

See Lee Decl. Ex. 7, at P392, P547-P549, P551,

P628-P632.
On other occasions, the Restaurant calculated the overtime
rate by subtracting the tip credit from the overtime rate and
then multiplying by one and one-half, which would result in
underpayment

of

the

employee

even

entitled to a tip credit allowance.

if

the

Restaurant

were

For example, during the pay

period ending December 18, 2011, plaintiff Rep worked fortyseven hours; she was paid $5.00 (the minimum wage of $7.25 minus
a $2.25 tip credit) for her first forty hours and $7.50 for the
next seven.

Lee Decl. Ex. 7, at P430.

Thus, the Restaurant

calculated her pay by multiplying the tip credit minimum wage by
one and one-half rather than multiplying the minimum wage by one
and one-half and then subtracting the tip credit, which would
have resulted in an hourly overtime rate of $8.625.

Moreover,

as discussed in Part II.B above, the Restaurant has failed to
show that it was entitled to a tip credit allowance at all.
In response, defendants argue that the Restaurant corrected
errors in its calculation of overtime if the undercompensated
employees were brought to management’s attention.

For example,

Mirchandani testified at his deposition that “if there are any
errors [in pay amounts], [the staff] bring it to our attention,
and the errors are taken care of.”

14

Mirchandani Dep. 60:15-17.

Defendants,

producing

certain

plaintiffs

(i.e.,

the

pay

were

minimum

allowance),

argue

statements

paid

at

such

show

an

overtime

rate

overtime

that

that

without

late

periods

rate
a

overpayments

manner of correcting prior errors.

of
tip

were

where
$10.88
credit

a

common

See Bellovin Aff. Ex. L;

Defs’ Mem. at 3.
This defense based on subsequent corrections fails to cure
defendants’ violation of the overtime provisions of at least
federal

labor

law.

The

FLSA

has

long

include a “prompt payment” requirement.
Klinghoffer
1960).
“must

Bros.

Realty

Corp.,

285

been

interpreted

to

See United States v.

F.2d

487,

491

(2d

Cir.

Whether the prompt payment requirement has been violated
be

determined

by

reference

to

objective

standards.”

Rogers v. City of Troy, N.Y., 148 F.3d 52, 58 (2d Cir. 1998).
Specifically,

payment

of

“overtime

compensation

earned

in

a

particular workweek must [generally] be paid on the regular pay
day for the period in which such workweek ends” and in any event
“may

not

be

delayed

for

a

period

longer

than

is

reasonably

necessary to compute and arrange for payment of the amount due.”
Conzo v. City of N.Y., 667 F. Supp. 2d 279, 288 (S.D.N.Y. 2009)
(quoting

29

C.F.R.

§ 778.106);

see,

e.g.,

Mendez

v.

U.S.

Nonwovens Corp., 2 F. Supp. 3d 442, 452-53 (E.D.N.Y. 2014).
Defendants

do

not

--

and

could

not

--

argue

that

the

Restaurant’s claimed practice of making ad hoc corrections to

15

unlawfully

low

pay

when

prompted

by

employees

met

objective

standards of prompt payment.
It should be apparent from the foregoing that, at least on
certain occasions, the Restaurant failed to pay plaintiffs the
appropriate overtime premium even if the Restaurant were to be
allowed a tip credit.

Furthermore, for the reasons discussed in

Part II.B above, the Restaurant may not assert the benefit of a
tip credit allowance.

Accordingly, the Restaurant is liable to

the extent that it failed to pay the minimum overtime wage,
without a tip credit allowance, to plaintiffs for their hours
worked in excess of forty per week.

D.

Wage Theft Prevention Act Claims
Plaintiffs next contend that defendants failed to comply

with

requirements

(“WTPA”),

which

effective

on

Specifically,

is

April

of

New

the
9,

York’s

name

of

2011.

plaintiffs

Wage
an

See

contend

Theft

Prevention

amendment
2010

that

N.Y.

they

to

the

Laws

are

Act
NYLL,

ch.

564.

entitled

to

statutory damages for defendants’ failure to provide them, at
the time of their hiring and annually thereafter, with notice of
defendants’ intent to take a tip credit, and to furnish them
with regular wage statements that met the WTPA’s requirements.
As

a

preliminary

matter,

defendants

argue

that

summary

judgment on WTPA claims is inappropriate because such claims

16

were

not

incorrect.

pleaded.

The

premise

underlying

this

argument

is

The Amended Complaint alleges, inter alia:

Defendants . . . operated their business with a policy
of not providing proper wages [sic] statements as
required under the New York Labor Law. Defendants are
required to provide itemized listings of deductions
taken on each wage statement. With respect to tipped
employees,
Defendants
failed
to
satisfy
the
requirements under the NYLL because such tip credit
allowance was never included in any wage statements to
tipped employees . . . .
Moreover, with respect to
all employees, Defendants failed to provide a wage
statement that satisfied statutory requirements under
the NYLL. Defendants also failed to provide a proper
wage and hour notice, at date of hiring and annually,
to all non-exempt employees per requirements of the
New York Labor Law.
Am. Compl. ¶ 60 (emphasis omitted).
describes

the

substance

of

the

This paragraph adequately
plaintiffs’

WTPA

claims.

Moreover, allegations of defendants’ failures to provide notice
of the tip credit allowance at hiring, annually, and in wage
statements are found elsewhere throughout the Amended Complaint.
See, e.g., id. ¶¶ 27, 34, 37, 58.

The Amended Complaint also

asserts that plaintiffs are “entitled to recover from Defendants
. . . statutory penalties . . . pursuant to New York Labor Law.”
Id. ¶ 61.
These paragraphs in the Amended Complaint were adequate to
put defendants on notice of the WTPA claims, even though the
Amended Complaint refers generally to the New York Labor Law
rather than specifically to the Wage Theft Prevention Act.

As

already noted, the Wage Theft Prevention Act is not an entirely

17

distinct

statute

but

rather

an

amendment

to

the

NYLL.

Furthermore, it is well established that “[t]he failure in a
complaint to cite a statute, or cite the correct one, in no way
affects the merits of a claim.”

Albert v. Carovano, 851 F.2d

561, 571 n.3 (2d Cir. 1988) (en banc).
recently

emphasized,

“[f]ederal

As the Supreme Court

pleading

rules

. . .

do

not

countenance dismissal of a complaint for imperfect statement of
the legal theory supporting the claim asserted.”

Johnson v.

City of Shelby, Miss., 135 S. Ct. 346, 346 (2014) (reversing
lower

court’s

§ 1983

claim

dismissal,
for

on

plaintiffs’

their complaint”).

summary

judgment,

“failure

to

of

invoke

42

U.S.C.

[§ 1983]

in

Finally, defendants do not contend that they

were prejudiced in any particular way by plaintiffs’ failure to
invoke

the

therefore

WTPA
turn

specifically
to

the

in

merits

the
(to

Amended
which

Complaint.5

defendants

do

We
not

respond) of plaintiffs’ two WTPA claims.

1.

Tip Credit Notice

Under

the

WTPA,

an

employer

must,

at

the

time

of

an

employee’s hiring, and then annually on or before the first of
5

Defendants rely on a line of authority holding that “a party cannot
seek summary judgment for himself on a new claim that has not been pled in
his complaint.” Hickey v. State Univ. of N.Y. at Stony Brook Hosp., No. 10
Civ. 1282, 2012 WL 3064170, at *5 (E.D.N.Y. July 27, 2012) (internal
quotation marks omitted) (declining, where the complaint asserted only Title
VII claims, to consider plaintiff’s arguments for summary judgment on First
Amendment and state Civil Service Law grounds). This principle is inapposite
where, as here, the claim is adequately pleaded in the complaint, albeit with
an arguably imperfect reference to the statutory authority of the claim.

18

February, provide an employee with a wage notice containing,
inter

alia,

allowances,

including

part of the minimum wage.

allowed

employees

to

allowances,

claimed

as

2010 N.Y. Laws ch. 564 § 3, amending

N.Y. Labor Law § 195(1)(a).
WTPA

tip

Prior to February 27, 2015, the
recover,

as

statutory

damages

for

violations of this wage notice requirement, $50 per work week,
not to exceed $2,500.
Labor

Law

2010 N.Y. Laws ch. 564 § 7, amending N.Y.

§ 198(1-b).6

Here,

it

is

undisputed

that

the

Restaurant did not provide plaintiffs with a wage notice form,
either at hiring or annually on or before February 1.
56.1 Stmt. ¶ 24; Pls.’ Mem. at 15-16.7

See Pls.’

Indeed, as discussed in

Part II.B above, it is undisputed that the Restaurant never
provided plaintiffs with any notice of its intention to take a
tip credit allowance.
For those plaintiffs who were hired before the WTPA took
effect

on

April

9,

2011,

the

failure

of

the

Restaurant

to

provide tip credit notice at the time of hiring cannot support a
claim under the WTPA, as the Second Circuit has held that the
WTPA does not apply retroactively.
Co.,

730

F.3d

137,

143-44

(2d

See Gold v. N.Y. Life Ins.
Cir.

2013).

Here,

it

is

undisputed that plaintiffs Inclan, Krauchanka, Wade, and Soltani
6

Statutory damages for WTPA violations were increased on February 27,
See 2014 N.Y. Laws ch. 537, § 2.
7
Defendants rely on a manager’s inability to recall whether the
Restaurant provided tip credit notice.
See Defs.’ 56.1 Counterstmt. ¶ 24.
As discussed in Part II.B.1 above, this is not sufficient to demonstrate a
genuine issue of material fact.
2015.

19

were all hired before the WTPA’s effective date.
Stmt. ¶¶ 1, 5, 13, 17.

See Pls.’ 56.1

The evidence is equivocal as to whether

plaintiff Rep was hired before, on, or after that date.

See

Deposition of Szilvia Agnes Rep at 48:12-50:6, Bellovin Aff. Ex.
G (Rep testified that she was hired in March or April 2011); see
also Pls.’ 56.1 Stmt. ¶ 9 (asserting that the Restaurant hired
Rep in March 2011).

Thus, none of the plaintiffs is entitled to

summary judgment on WTPA wage notice statutory damages from the
date of hiring.
However, the WTPA also required the Restaurant to provide
annual notice of the tip credit to its employees on or before
February 1, 2012.

It is undisputed that two of the plaintiffs

(namely, Inclan and Soltani) remained employed at the Restaurant
after that date.

Pls.’ 56.1 Stmt. ¶¶ 1, 17.8

As the Restaurant

did not provide them with WTPA-compliant wage notice statements,
plaintiffs may recover statutory damages of $50 per work week
during the time of their employment after that date.9

8

Plaintiffs state in their Rule 56.1 statement that it is undisputed
that plaintiff Krauchanka was employed at the Restaurant until April 2012.
Pls.’ 56.1 Stmt. ¶ 5. However, Krauchanka testified that he was fired from
the Restaurant in June 2011. Deposition of Ivan Krauchanka at 41:4-5, 87:918, Bellovin Aff. Ex. F.
9
The maximum statutory damages for this violation of $2,500 is
irrelevant, because both Inclan and Soltani ended employment within mere
months. Pls.’ 56.1 Stmt. ¶¶ 1, 17; Defs.’ 56.1 Counterstmt. ¶ 1.

20

2.

Wage Statements

The

WTPA

employee’s

also

pay

requires

statement

employers

an

to

accounting

include
of

in

“gross

each
wages;

deductions; allowances, if any, claimed as part of the minimum
wage; and net wages.”

2010 N.Y. Laws ch. 564, § 3, amending

N.Y. Labor Law § 195(3).
allowed

employees

to

Prior to February 27, 2015, the WTPA
recover,

as

statutory

damages

for

violations of this wage statement requirement, $100 per work
week, not to exceed $2,500.

See 2010 N.Y. Laws ch. 564 § 7,

amending N.Y. Labor Law § 198(1-d).
The

pay

statements

furnished

by

the

Restaurant

to

its

employees for pay periods prior to the pay period ending on June
12,

2011,

periods.

contain

the

amount

of

tips

earned

during

See, e.g., Lee Decl. Ex. 7, at P401, P481.

those

However,

these pay statements do not state the amount of the tip credit
allowance.

Thus, those pay statements were not in compliance

with the WTPA.
2011,

the

Beginning with the pay period ending on June 12,

Restaurant

began

to

provide

its

employees

with

a

supplemental form entitled “Payroll Payment Details” along with
the pay statements generated by the Restaurant’s payroll service
providers.

See Pls.’ 56.1 Stmt. ¶ 22; Lee Decl. Ex. 5.

Unlike

the pay statements, that supplemental form showed the per-hour
amount of the tip credit.

However, it did not show the total

amount of the tip credit allowance taken nor the employee’s

21

gross

wages

before

tip

credit

allowance.

Thus,

these

supplemental forms did not cure the defects in the Restaurant’s
pay

statements.

Accordingly,

plaintiffs

are

entitled

to

statutory damages of $100 per work week, from April 9, 2011,
through the end of each plaintiff’s employment, not to exceed
$2,500 per plaintiff.

E.

Spread-of-Hours Premium
Under the regulations implementing the NYLL, a restaurant

employee is entitled to an additional hour of pay at the minimum
hourly rate “[o]n each day on which the spread of hours exceeds
[ten].”

12 N.Y.C.R.R. § 146-1.6(a) (effective Jan. 1, 2011); 12

N.Y.C.R.R. § 137-1.7 (repealed effective Jan. 1, 2011).

The

term “spread of hours” is defined as “the length of the interval
between the beginning and end of an employee’s workday . . . .
includ[ing] working time plus time off for meals plus intervals
off duty.”
accord

12

12 N.Y.C.R.R. § 146-1.6 (effective Jan. 1, 2011);
N.Y.C.R.R.

§ 137-3.11

(repealed

effective

Jan.

1,

2011).
Defendants

admit

that

the

Restaurant

failed

to

pay

plaintiffs a spread-of-hours premium when plaintiffs’ workday
exceeded ten hours per day, although defendants claim that this
failure “was an honest mistake in the law.”

Pls.’ 56.1 Stmt.

¶ 28; Defs.’ 56.1 Counterstmt. ¶ 28; Defs.’ Mem. at 5.

22

The

Restaurant

is

therefore

liable

for

unpaid

spread-of-hours

premiums where applicable.

F.

FLSA Statute of Limitations
Under

minimum

the

wage

§ 255(a).

FLSA,

and

the

overtime

general
claims

statute

of

is

years.

two

limitations
29

for

U.S.C.

However, if the employee proves that the employer’s

violation is willful, the limitations period is increased to
three years.

Id.; Young v. Cooper Cameron Corp., 586 F.3d 201,

207 (2d Cir. 2009).10

To make out a willful violation, the

employee must establish “that the employer either knew or showed
reckless disregard for the matter of whether its conduct was
prohibited by the [FLSA].”
U.S. 128, 133 (1988).
does

not

encompass

“unreasonabl[e].”

McLaughlin v. Richland Shoe Co., 486

However, the category of willful conduct
conduct

that

is

“merely

negligent”

or

Id.; Reich v. Waldbaum, Inc., 52 F.3d 35, 39

(2d Cir. 1995).
Because of the difficulty in discerning, as a matter of
law, whether unlawful conduct is on the one hand negligent or
unreasonable,

or

on

the

other

hand

knowing

or

reckless,

“[c]ourts in this Circuit have generally left the question of
willfulness to the trier of fact.”

Ramirez v. Rifkin, 568 F.

Supp. 2d 262, 268 (E.D.N.Y. 2008) (collecting cases).
10

In contrast, the NYLL’s limitations period is six years.
Labor Law § 663(3).

23

See also
See N.Y.

Hart v. Rick’s Cabaret Int’l, Inc., 967 F. Supp. 2d 901, 937
(S.D.N.Y.

2013)

determined

at

(“Although

the

summary

willfulness
judgment

proving willfulness is high.”).

can

stage,

sometimes
standard

the

be
for

We see no reason in this case

to depart from the general reluctance of courts to resolve the
question of willfulness on a motion for summary judgment.
Plaintiffs
Mirchandani
action.

rely

were
See

principally

defendants

Pls.’

Mem.

in
at

on
a

the

prior

21-22;

fact

that

private

Pls.’

56.

NYHG

and

wage-and-hour
Stmt.

¶ 29.

However, that case was settled without litigation on the merits
or any finding of wrongdoing.

See Stipulation of Voluntary

Dismissal, Afonso v. New York Hospitality Group, Inc., No. 10
Civ. 7782 (HB) (S.D.N.Y. Aug. 26, 2011).

Furthermore, both

Mirchandani and one of the Restaurant’s managers testified that
other than that prior lawsuit, the Restaurant had received no
wage-related complaints.
13:25-14:2.

See Mirchandani Dep 48:4-7; Daci Dep.

We conclude that a jury could permissibly find that

the Restaurant’s violations were not willful.

Thus, plaintiffs’

request for summary judgment on the issue of willfulness is
denied.

G.

Liquidated Damages
Plaintiffs

liquidated

request

damages

under

a

ruling
both

the

24

that
FLSA

they

are

and

the

entitled
NYLL

on

to
the

ground

that

willful.

the

Restaurant’s

violations

of

those

laws

were

If this were the correct legal standard, plaintiffs’

request would be denied for the reasons in Part II.F above.
However, a showing of willfulness is not required for liquidated
damages

to

be

awarded.

We

address

each

statute

in

turn,

followed by plaintiffs’ contention that liquidated damages may
be awarded cumulatively under both statutes.

1.

FLSA

“Under the FLSA, a district court is generally required to
award a plaintiff liquidated damages equal in amount to actual
damages” for violations of the FLSA’s minimum wage and overtime
provisions.

Barfield v. N.Y.C. Health & Hosps. Corp., 537 F.3d

132, 150 (2d Cir. 2008) (citing 29 U.S.C. § 216(b)).

However, a

district court has “discretion to deny liquidated damages where
the employer shows that, despite its failure to pay appropriate
wages,

it

acted

in

subjective

‘good

faith’

with

objectively

‘reasonable grounds’ for believing that its acts or omissions
did not violate the FLSA.”
29 U.S.C. § 260).

Barfield, 537 F.3d at 150 (quoting

“The employer bears the burden of proving

good faith and reasonableness, [and] the burden is a difficult
one, with double damages being the norm and single damages the
exception.”

Herman v. RSR Sec. Services Ltd., 172 F.3d 132, 142

(2d Cir. 1999) (citing Reich v. S. New Engl. Telecomms. Corp.,

25

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

“To establish good faith, the

employer must take active steps to ascertain the dictates of the
FLSA and then act to comply with them.”

RSR, 172 F.3d at 142.

See also Brock v. Wilamowsky, 833 F.2d 11, 19 (2d Cir. 1987)
(“The

defense

requires

plain

and

substantial

evidence

of

at

least an honest intention to ascertain what the [FLSA] requires
and to comply with it.”).
In support of their good faith, defendants principally rely
on an argument that they “consulted with attorneys to ensure
their compliance with applicable FLSA statutes,” arguing that
“‘reliance on erroneous advice from an outside source, such as
counsel,’” will support a defense to liquidated damages.

Defs.’

Mem. at 6 (quoting Lavin-McEleney v. Marist Coll., No. 96 Civ.
4081, 1999 WL 33500070, at *2 (S.D.N.Y. Sept. 28, 1999), aff’d,
239 F.3d 476 (2d Cir. 2001)).

But while it is undisputed that

NYHG and Mirchandani retained counsel in the prior action, see
Pls.’ 56.1 Stmt. ¶ 29, the record contains no evidence as to the
advice of prior counsel nor of whether defendants followed that
advice -- far less whether the advice was erroneous.

Indeed,

defendants asserted the attorney-client privilege to prevent the
advice

of

Mirchandani
defendants
would

prior
Dep.
could

clearly

be

counsel
at

from

coming

48:12-49:12.

establish
unable

to

In

subjective
establish

26

into
any

good

evidence.
event,

even

See
if

faith,

defendants

objectively

reasonable

grounds for thinking that their practices comported with the
FLSA’s

requirements.

Accordingly,

there

is

no

doubt

that

plaintiffs are entitled to the full amount of liquidated damages
available under the FLSA.

2.

NYLL

Like the FLSA, the NYLL provides for liquidated damages in
addition to actual damages under some circumstances.
Labor Law §§ 198(1-a), 663(1).

See N.Y.

The New York legislature has

amended the liquidated damages provision twice in recent years,
both times making it easier for employees to claim liquidated
damages.

See Ryan v. Kellogg Partners Inst. Servs., 19 N.Y.3d

1, 10 n.8 (2012).
Prior to November 24, 2009, an employee would be entitled
to an additional twenty-five percent liquidated damages under
the NYLL only if the employee could prove “that the employer’s
failure to pay the wage required by [article 6 of the NYLL] was
willful.”

N.Y. Labor Law § 198(1-a) (version effective prior to

Nov.

2009);

23,

see

also

N.Y.

Labor

effective prior to Nov. 23, 2009).

Law

§ 663(1)

(version

The meaning of willfulness

under the NYLL’s liquidated damages provision was considered to
be

the

same

as

willfulness

limitations provision.

under

the

FLSA’s

statute

of

See Kuebel v. Black & Decker Inc., 643

F.3d 352, 366 (2d Cir. 2011); Hart v. Rick’s Cabaret Int’l,

27

Inc., 967 F. Supp. 2d 901, 937 (S.D.N.Y. 2013); Moon v. Kwon,
248 F. Supp. 2d 201, 235 (S.D.N.Y. 2002).
The

NYLL’s

liquidated

damages

provision

was

reformed

2009 to more closely resemble the FLSA’s provision.
on

November

24,

2009,

an

employee

would

be

in

Beginning

presumptively

entitled to liquidated damages “unless the employer proves a
good faith basis to believe that its underpayment of wages was
in

compliance

with

the

law.”

2009

N.Y.

Laws

ch.

372

§ 1,

amending N.Y. Labor Law § 198(1-a); see also 2009 N.Y. Laws ch.
372 § 3, amending N.Y. Labor Law § 663(1).

On April 9, 2011,

the WTPA further aligned the NYLL’s liquidated damages provision
with that of the FLSA by increasing the amount of liquidated
damages to one hundred percent.

See 2010 N.Y. Laws ch. 564

§§ 7,

of

16.

The

statutory

text

the

liquidated

damages

provisions of the present NYLL is not identical to that of the
FLSA.

Compare

U.S.C.

§ 260.

distinguished

N.Y.

Labor

Law

§§ 198(1-a),

However,
the

courts

have

federal

standard

from

standard of good faith.

663(1),

not
the

with

29

substantively
current

state

See, e.g., He v. Home on 8th Corp., No.

09 Civ. 5630, 2014 WL 3974670, at *7 n.19 (S.D.N.Y. Aug. 13,
2014); Eschmann v. White Plains Crane Service, Inc., No. 11 Civ.
5881, 2014 WL 1224247, at *9 (E.D.N.Y. Mar. 24, 2014).

Nor do

defendants argue that there is a difference between the relevant
federal and state standards.

Thus, for the reasons in Part

28

II.G.1 above, the Restaurant is liable for liquidated damages
based

on

NYLL

violations

beginning

on

November

24,

2009.

However, for the reasons in Part II.F above, we decline to rule
that the Restaurant is liable as a matter of law for liquidated
damages based on the alleged willfulness of its NYLL violations
prior to November 24, 2009.

3.

Cumulative Liquidated Damages

Plaintiffs seek a ruling that where the liquidated damages
provisions of both the FLSA and the NYLL apply, plaintiffs may
recover

liquidated

damages

cumulatively

under

both

statutes.

There is no appellate authority as to whether a plaintiff may
recover

cumulative

(sometimes

called

“simultaneous”

or

“stacked”) liquidated damages under the FLSA and NYLL, and the
district courts in this Circuit are deeply divided.
have

awarded

cumulative

liquidated

damages

have

Courts that
begun

their

analysis from the proposition that liquidated damages under the
FLSA are described as “compensation, not a penalty,” Overnight
Motor Transp. Co. v. Missel, 316 U.S. 572, 583 (1942); see,
e.g.,

United

States

v.

Sabhani,

599

F.3d

215,

260

(2d

Cir.

2010), whereas the NYLL’s liquidated damages provision is said
to “constitute a penalty,” Reilly v. Natwest Markets Grp., Inc.,
181 F.3d 253, 265 (2d Cir. 1999) (quoting Carter v. Frito-Lay,
Inc., 74 A.D.2d 550, 551 (1st Dep’t 1980), aff’d, 52 N.Y.2d 994

29

(1981)).

Those

courts

have

reasoned

that

“a

prevailing

plaintiff who can justify both [FLSA] liquidated damages and
[NYLL liquidated] damages should be eligible to recover both,
since they . . . serve fundamentally different purposes.”

Ke v.

Saigon Grill, Inc., 595 F. Supp. 2d 240, 262 (S.D.N.Y. 2008)
(internal

quotation

marks

omitted);

see,

e.g.,

Gurung

v.

Malhotra, 851 F. Supp. 2d 583, 593-94 (S.D.N.Y. 2012); Santillan
v. Henao, 822 F. Supp. 2d 284, 297 (E.D.N.Y. 2011); Ho v. Sim
Enters.,

Inc.,

No.

11

Civ.

2855,

2014

WL

1998237,

at

*19

(S.D.N.Y. May 14, 2014).
In contrast, other district courts have declined to award
cumulative

liquidated

damages

on

the

ground

that

“the

distinction between compensatory and punitive for characterizing
liquidated

damages

under

the

exalting form over substance.”

FLSA

and

NYLL

[is]

semantic,

Gortat v. Capala Bros., 949 F.

Supp. 2d 374, 381 (E.D.N.Y. 2013); see, e.g., Parilla v. Salt &
Pepper on 33rd St. Inc., No. 12 Civ. 6382, 2013 WL 4536628, at
*2 (S.D.N.Y. Apr. 8, 2013).

These courts have reasoned that

cumulative liquidated damages are inappropriate because “[b]oth
forms of damages seek to deter wage-and-hour violations in a
manner calculated to compensate the party harmed.”
Creative

Customs

Cabinets

Inc.,

No.

13

Civ.

Chuchuca v.

2506,

2014

WL

6674583, at *16 (E.D.N.Y. Nov. 25, 2014); see, e.g., Shiu v. New
Peking Taste Inc., No. 11 Civ. 1175, 2014 WL 652355, at *13

30

(E.D.N.Y. Feb. 19, 2014); Yin v. Kim, No. 07 Civ. 1236, 2008 WL
906736, at *7 (E.D.N.Y. Apr. 1, 2008).
We find the latter view more persuasive.
there

were

liquidated

once

a

damages

plausibly
under

substantive

the

FLSA

Even assuming

distinction

and

NYLL,

the

between
recent

amendments to the NYLL have undermined the basis for such a
distinction.

The

view

that

NYLL

liquidated

damages

are

penalties rather than compensation rested on the premise that
NYLL

liquidated

willfulness.

damages

See

required

Carter,

74

proof

A.D.2d

of

at

the

550-51

employer’s
(“Plaintiff

contends that the provision for liquidated damages is not a
penalty

but

contention

additional
convincing

compensation.
in

light

of

We
the

do

not

find

application

of

this
the

application of this provision being expressly conditioned on a
finding of willful conduct on the part of the employer.).11

But

this premise is no longer accurate, as after November 24, 2009,
liquidated damages no longer depend upon the willfulness of the
violations.

Thus, the distinction drawn between the purposes of

the two statutes is no longer persuasive.

Furthermore, after

the enactment of the WTPA, the amounts of liquidated damages are
identical under the two statutes.
Rest.,

897

F.

Supp.

2d

76,

11

See Gunawan v. Sake Sushi
91

n.11

(E.D.N.Y.

2012)

See also Reilly, 181 F.3d at 265 (noting that “liquidated damages under
the [NYLL] ‘constitute a penalty’ to deter an employer’s willful withholding
of wages due” (emphasis added) (quoting Carter, 74 A.D.2d at 550)).

31

(acknowledging
statutes

now

that

“[t]o

provide

the

for

extent

essentially

the

federal

identical

and

remedies

state
with

respect to liquidated damages, it is harder to argue that they
are designed to compensate a plaintiff for disparate harms”);
Gortat, 949 F. Supp. 2d at 381 n.3 (“The amendment[s] . . .
bespeak[]

an

acknowledgement

that

dichotomy is a semantic one.”).

the

compensatory/punitive

Accordingly, we decline to rule

that plaintiffs are entitled to cumulative liquidated damages
under the FLSA and NYLL.12

H.

Joint and Several Liability
Plaintiffs request a ruling that Mirchandani was a joint

employer within the meaning of the FLSA and the NYLL and that he
is

therefore

jointly

and

violations of those laws.

severally

liable

with

NYHG

for

In their cross-motion, the Moving

Defendants request a ruling dismissing both RHI and Mirchandani
from the case on the ground that neither that neither was an
employer of plaintiffs.

Plaintiffs do not oppose the Moving

Defendants’ motion as to RHI, nor do plaintiffs dispute that RHI
has “no relationship with NYHG or Le Bateau Ivre.”
12

Defs.’ 56.1

We reserve judgment on whether cumulative liquidated damages could be
available for violations prior to November 24, 2009.
Such violations could
only serve as the basis for liquidated damages under either the FLSA or NYLL
if they were willful, both because of the then-prevailing standard under the
NYLL and because FLSA claims arising before June 8, 2010, would be timebarred if premised on non-willful violations.
In Part II.F above, we held
that plaintiffs are not entitled to summary judgment on the question of
willfulness. Accordingly, the issue of cumulative liquidated damages is not
ripe for decision as to pre-November 24, 2009 claims.

32

Stmt. ¶ 24.

Accordingly, plaintiffs’ claims against RHI are

dismissed, and we focus on the parties’ arguments with respect
to Mirchandani.
The

FLSA

defines

the

employer-employee

relationship

broadly, “‘cover[ing] some parties who might not qualify as such
under

a

strict

application

of

traditional

agency

law

principles,’ in order to effectuate the remedial purposes of the
act.”

Barfield v. N.Y.C. Health & Hosps. Corp., 537 F.3d 132,

141 (2d Cir. 2008) (quoting Nationwide Mut. Ins. Co. v. Darden,
503 U.S. 318, 326 (1992)).

“[T]he determination of whether an

employer-employee relationship exists for purposes of the FLSA
should be grounded in ‘economic reality rather than technical
concepts,’ determined by reference not to ‘isolated factors, but
rather

upon

the

circumstances

of

the

whole

activity.’”

Barfield, 537 at 141 (quoting Goldberg v. Whitaker House Coop.,
Inc., 366 U.S. 28, 33 (1961); Rutherfood Food Corp. v. McComb,
331 U.S. 722, 730 (1947)).

Thus, within the context of the

FLSA, employment is “a flexible concept to be determined on a
case-by-case

basis

circumstances.”
An

by

review

of

the

totality

of

the

Barfield, 537 at 141-42.

employee

may

simultaneously

within the meaning of the FLSA.

have

multiple

employers

See, e.g., Zheng v. Liberty

Apparel Co., 355 F.3d 61, 66 (2d Cir. 2003).

Under certain

circumstances, the FLSA permits “an individual within a company

33

that . . . employs a worker [to be held] personally liable for
damages as that worker’s ‘employer.’”
722 F.3d 99, 105 (2d Cir. 2013).
circumstances
Circuit

obtain

precedents

here,

we

In determining whether those

are

squarely

Irizarry v. Catsimatidis,

guided

addressing

by

the

Second

issue.

this

two

See

Irizarry, 722 F.3d 99; RSR, 172 F.3d 132.
The

first,

RSR,

involved

a

corporation

(“RSR”)

in

the

business of providing security guard services, which had failed
to pay those guards minimum wage and overtime.
shareholders was a lawyer named Portnoy.

One of RSR’s two

RSR, 172 F.3d at 136.

Portnoy was also chairman of the board, and had some involvement
in RSR’s day-to-day business (portions of which were run out of
Portnoy’s

law

office),

security guards.
executives)

Id.

although

he

was

periodically

“viewed

by

not

supervise

the

Some of RSR’s employees (including senior
reported

to

occasionally gave them instructions.
who

did

others

as

Portnoy,

and

Id. at 136-37.

having

control

over

Portnoy
Portnoy,

RSR,”

and

“represented himself . . . as having such authority,” dominated
RSR in part because his access to bank credit permitted him to
“exercise[]

financial

control.”

Id.

The

Second

Circuit

affirmed the district court’s ruling, after a bench trial, that
Portnoy was a joint employer of the security guards.
141.

34

Id. at

Applying

the

economic

reality

test

under

these

circumstances, the RSR court began with the factors identified
by Carter v. Dutchess Community College, 735 F.2d 8 (2d Cir.
1984), as relevant to that test:

“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.”

(quoting Carter, 735 F.2d at 12).13

RSR,

172

F.3d

at

139

The Circuit held that the

first three of these Carter factors were satisfied, as Portnoy
had hired managers (including “individuals who were in charge of
the

guards”);

locations

and

Portnoy

occasionally

assigned

directed

a

to

colleague

guards

revised

the

to

work

company’s

employment forms; and, although Portnoy did not set wages, he
had previously put an end to an illegal pay practice and had
occasionally signed payroll checks.
finding

that

emphasized
relationship

Portnoy
that
“does

was

the
not

the

RSR, 172 F.3d at 140.

guards’

existence
require

of

employer,
an

continuous

the

In

Circuit

employer-employee
monitoring

of

employees, looking over their shoulders at all times, or any
sort of absolute control of one’s employees.”
13

Id. at 139; see

Neither individual nor joint liability under the FLSA was at issue in
Carter appeal. Instead, the issue was whether a college that used collegeeducated prison inmates as teaching assistants in classes offered at the
prison could be held liable under the FLSA as an employer of those inmates,
notwithstanding the prison’s ultimate control over its inmate population.
See Carter, 735 F.2d at 12.

35

also

id.

(“Control

may

be

restricted,

or

exercised

only

occasionally, without removing the employment relationship from
the

protections

of

the

FLSA

. . . .”).

The

Circuit

also

emphasized Portnoy’s exercise of general authority in, and his
financial control, of RSR.

Id. at 140.

The other Second Circuit precedent, Irizarry, was a wageand-hour

action

against

a

substantial

supermarket

chain

(“Gristede’s”) and John Catsimatidis, its chairman, president,
and CEO.

On summary judgment, the district court ruled that

Catsimatidis

was

the

plaintiffs’

employer.

Affirming,

the

Second Circuit built on the RSR analysis by emphasizing two
particular

areas

of

inquiry

for

cases

defendants alleged to be FLSA employers.

involving

individual

The first such area of

inquiry identified in Irizarry is “the scope of an individual’s
authority or ‘operational control’ over a company.”
722 F.3d at 106.

As the Circuit explained:

Irizarry,

“It is appropriate

. . . to require some degree of individual involvement in a
company in a manner that affects employment-related factors such
as

workplace

conditions

compensation.”

Id. at 109.

and

operations,

personnel,

or

Thus, to be held as an employer, an

individual must “exercise[] operational control over employees,”
which

the

company,

individual

and

the

does

decisions

“if
it

his

or

entails,

her

role

within

the

directly

affect

the

nature or conditions of the employees’ employment.”

36

Id. at 110;

see also id. (“Although this does not mean that the individual
‘employer’ must be responsible for managing plaintiff employees
-- or indeed that he or she must have directly come into contact
with the plaintiffs, their employees, or their schedules -- the
relationship between the individual’s operational function and
the plaintiffs’ employment must be closer in degree than simple
but-for causation.”).
The
whether

second
the

power

“hypothetical”
explained,

area

or

of

of

inquiry

the

putative

“actual.”

“[o]wnership,

identified

Id.

or

individual

at

a

in

106.

stake

is

employer

As

in

Irizarry

a

the

was

Circuit

company,

is

insufficient to establish that an individual is an ‘employer’
without

some

employees.”

involvement

in

the

company’s

employment

of

the

Id. at 111.

Considering

these

two

areas,

the

Circuit

noted

that

Catsimatidis was a hand’s-on executive involved in Gristede’s
“banking,”

“financial[s],”

“real

estate,”

“merchandising,”

“governmental relations,” and “relationships with vendors,” id.
at 112, and who both held and exercised the ultimate power “to
control Gristede’s operations at a high level,” id. at 113 n.7.
Furthermore,
managerial
manager

“[a]lthough

control

. . .

he

in

stores

exercised

multiple occasions.”

Catsimatidis
on

the

influence

Id. at 113.

37

did

not

day-to-day
in

exercise

level

specific

of

stores

a
on

Catsimatidis made regular

check-ups on Gristede’s stores, and from time to time he would
“address problems that occurred in individual stores.”

Id.

The

Circuit concluded that “Catsimatidis had functional control over
the enterprise as a whole.”
The

Irizarry

court

Id. at 116.
also

emphasized

that

“Catsimatidis

satisfied two of the Carter factors in ways that we particularly
emphasized

in

RSR:

the

hiring

of

managerial

overall financial control of the company.”

employees

Irizarry, 722 F.3d

at 116; see id. at 114-16 (analyzing Carter factors).
the

totality

of

the

circumstances,

the

and

court

Reviewing

explained

that

although there was no evidence that Catsimatidis was personally
responsible for FLSA violations, nor that he ever interacted
with

the

plaintiffs,

his

“actions

and

responsibilities

--

particularly as demonstrated by his active exercise of overall
control over the company, his ultimate responsibility for the
plaintiffs’ wages, his supervision of managerial employees, and
his actions in individual stores -- demonstrate that he was an
‘employer’ for purposes of the FLSA.”

Id. at 117.

Guided by the analysis of RSR and Irizarry, we agree with
plaintiffs

that

Mirchandani

meaning of the FLSA.

was

their

employer

within

the

We begin with Mirchandani’s operational

control over the Restaurant, which is amply evidenced by his own
testimony.
the

sole

See Irizarry, 722 F.3d at 106-10.
owner

of

NYHG,

and

38

he

described

Mirchandani was
himself

as

its

“president.”

Defs.’ 56.1 Stmt. ¶ 21; Mirchandani Dep. 9:5-10.

Mirchandani testified that he “signed the lease on behalf of the
restaurant,” Mirchandani Dep. 10:17-19, and that he personally
signed contracts with the Restaurant’s vendors, Mirchandani Dep.
11:2-10.

Mirchandani

also

personally

hired

the

management team, including its executive chef.
9:11-18, 21:11-18; see Pls.’ Opp. Mem. 6.
weekly

meeting[s]

Counterstmt.
they

¶ 31;

discussed

18:10-12.

with
see

the

“[r]estaurant

Dep.

Mirchandani Dep.

Mirchandani “h[e]ld

management

Mirchandani

Restaurant’s

team,”

Defs.’

17:25-18:6,

operations,”

56.1

at

which

Mirchandani

Dep.

“[I]ssues regarding wage and hour were addressed” at

those meetings.

Defs.’ 56.1 Counterstmt. ¶ 31; see Mirchandani

Dep. 18:13-15.

When the prior lawsuit was brought against the

Restaurant,
instructed

Mirchandani
them

to

overtime” and tips.
in

addition

to

discussed

“keep

it

accurate

with

his

records”

managers,
of

Mirchandani Dep. 19:5-20:3.

his

weekly

meeting

with

“wage

and
and

Furthermore,

the

Restaurant’s

management, Mirchandani would “eat and drink” at the Restaurant
and, on those visits, he would “get an overview” of operations
“[b]y keeping [his] eyes open.”
It
Irizarry

is

apparent

and

RSR,

that,

Mirchandani Dep. 17:13-24.

like

Mirchandani

the

individual

actively

defendants

exercised

control and oversight over the Restaurant.

in

operational

Furthermore, this

operational control directly affected plaintiffs’ conditions of

39

employment, as Mirchandani had at least shared responsibility
for the Restaurant’s pay policies.

Mirchandani testified that,

as for the kitchen staff, the Restaurant’s chef was responsible
for determining whether the employees’ qualifications merited a
salary above the minimum wage; but “[o]n occasion” the “chef
ha[d] to get [Mirchandani’s] okay on it before he gives them a
higher pay.”

Mirchandani Dep. 28:13-20.

Moreover, Mirchandani

testified that he himself “set th[e] policy” that all “front-ofthe-house staff” -- i.e., waitstaff such as plaintiffs -- were
paid minimum wage plus overtime.

Mirchandani Dep. 28:21-29:6.14

Defendants contend that although Mirchandani had potential
power

over

the

Restaurant’s

affairs,

would, he did not exercise that power.
at 6.
is

as

any

business

owner

See, e.g., Defs.’ Mem.

Defendants are correct insofar as mere “[o]wnership . . .

insufficient

to

establish

14

that

an

individual

is

an

Separately, in response to the question “how do you determine the
rate,” Mirchandani testified: “The rate is already determine[d]. It’s in my
office. My bookkeepers handle it. We call in a payroll.” Mirchandani Dep.
27:6-10. It is clear from context that the bookkeeper’s role was to “handle”
the implementation of the regular wage payments, in cooperation with a
payroll service.
Defendants’ contention that the Restaurant’s bookkeeper
chose the amount to pay the Restaurant’s employees is thus not only
implausible, it is also not supported by the record.
Additionally, in a subsequent affidavit, Mirchandani stated:
“I did
not determine the rate . . . of payment for any of the Plaintiffs in this
case” or “for any employees at the level of any of the Plaintiffs in this
case.”
Affidavit of Raju S. Mirchandani, dated July 23, 2014, ¶¶ 16-17,
Bellovin Aff. Ex. K.
We disregard this affidavit to the extent that it
contradicts Mirchandani’s deposition testimony. See Hayes v. N.Y.C. Dep’t of
Corrections, 84 F.3d 614, 619 (2d Cir. 1996) (“a party may not create an
issue of fact by submitting an affidavit in opposition to a summary judgment
motion that, by omission or correction, contradicts the affiant’s previous
deposition testimony”); Mack v. United States, 814 F.2d 120, 124 (2d Cir.
1987) (“a party’s affidavit which contradicts his own prior deposition
testimony should be disregarded on a motion for summary judgment”).

40

‘employer.’”

Irizarry,

aforementioned
other

undisputed

involvement

in

at

111.

Mirchandani’s

reasons,

722

own

testimony

demonstrate

his

active,

facts

the

business

F.3d

of

its

However,

Restaurant

for

the

and

the

extensive

including

its

decisions on employee-related matters.
As

in

factors.

Irizarry

and

RSR,

we

also

consider

the

Carter

See Irizarry, 722 F.3d at 114-16; RSR, 172 F.3d at

139-40.

Two of these factors clearly support the conclusion

that Mirchandani was plaintiffs’ employer.

First, Mirchandani

“had power to hire and fire the employees.”

Carter, 735 F.2d at

12.

Defendants argue that Mirchandani neither hired nor fired

any of this case’s plaintiffs, nor for that matter any low-level
employees.

Defs.’ 56.1 Stmt. ¶¶ 25-26.

However, although one

of the Restaurant’s managers testified that she was “in charge
of

promotion,

hiring,

[and]

firing,”

Daci

Dep.

at

18:13-14,

another of the Restaurant’s managers testified that Mirchandani
personally approved the Restaurant’s hires, Deposition of Aisa
Kasim at 10:25-11:23, Bellovin Aff. Ex. E.
himself

testified

“[o]n

terminated

21:19-23.

More importantly, it is undisputed that Mirchandani

(“Although

management

this

hiring

employees.

he

of

his

Restaurant’s

occasion,”

employment

selected

the

that,

And Mirchandani

team.

See

involved

mainly

41

RSR,

Mirchandani

172

F.3d

managerial

Dep.

at

140

staff,

the

fact

that

he

hired

individuals

who

were

in

charge

of

the

[employees] is a strong indication of control.”).
Second, Mirchandani “determined the rate . . . of payment”
for plaintiffs and other employees.

Carter, 735 F.2d at 12.

As

already discussed, Mirchandani “set th[e] policy” that front-ofthe-house staff, including plaintiffs, would be paid the minimum
wage, and he also approved higher salaries where warranted for
kitchen staff.

Mirchandani Dep. 28:21-29:6.15

Ultimately,

we

must

consider

“the

totality

circumstances, no one of which is exclusive.”

of

the

RSR, 172 F.3d at

139.

Here, the evidence inescapably leads to the conclusion

that

Mirchandani

exercised
general

dominated,

significant

business

plaintiffs’ wages.

financially

functional

affairs

of

the

control

controlled,

over

Restaurant,

not

but

only

indeed

and
the
over

As a practical matter, Mirchandani was the

Restaurant’s “top man.”

Irizarry, 722 F.3d at 116 (quoting

Donovan v. Grim Hotel Co., 747 F.2d 966, 972 (5th Cir. 1984)).
Thus, he was plaintiffs’ employer within the meaning of the
FLSA.16

15

As for the other Carter factors, the evidence is at best equivocal that
Mirchandani set employee schedules, and we are unpersuaded that Mirchandani
himself maintained employee records.
However, “[n]o one of the factors
standing alone is dispositive.” RSR, 172 F.3d at 139.
16
Defendants rely on Wirtz v. Pure Ice Co., 322 F.2d 259 (8th Cir. 1963).
But to describe Pure Ice is to distinguish it.
There, the individual
defendant was a majority shareholder who lived in a different city from the
company’s plant, which he visited only two or three times per year; he had
nothing to do with the company’s employees or their wages, and he was so far
removed from its operations that it took him at least six weeks to learn that

42

Neither

the

New

York

Court

of

Appeals

nor

the

Second

Circuit has decided whether “the tests for ‘employer’ status are
the same under the FLSA and the NYLL.”

Irizarry, 722 F.3d at

117; see, e.g., Ethelberth v. Choice Sec. Co., No. 12 Civ. 4856,
2015 WL 861756, at *15, -- F. Supp. 3d. ---, --- (E.D.N.Y. Feb.
27,

2015).

However,

“district

courts

in

this

Circuit

have

consistently interpreted the definition of ‘employer’ under the
New York Labor Law coextensively with the definition used by the
FLSA.”

Ho v. Sim Enters., Inc., No. 11 Civ. 2855, 2014 WL

1998237, at *10 (S.D.N.Y. May 14, 2014) (citing Moon v. Kwon,
248 F. Supp. 2d 201, 236 n.17 (S.D.N.Y. 2002)).
not argue otherwise.

The parties do

Accordingly, we hold that Mirchandani was

plaintiffs’ employer for the purpose of both the FLSA and the
NYLL, and that he will be jointly and severally liable for any
judgment resulting from plaintiffs’ claims.

CONCLUSION
For the foregoing reasons, plaintiffs’ motion for partial
summary judgment (Doc. 80) is granted in part and denied in
part, and the Moving Defendants’ motion for summary judgment
(Doc. 85) is granted in part and denied in part.

To reiterate,

the Court rules that:
its manager had left the country with no forwarding address, leaving the
manager’s wife in charge. Id. at 260, 263. “When he did learn of [this], he
acquiesced in the arrangement,” as he intended to sell the business. Id. at
260-61.

43

(1) plaintiffs are entitled to unpaid minimum wages
under

the

FLSA

and

the

NYLL,

without

a

tip

credit

allowance;
(2) plaintiffs are entitled to unpaid overtime wages
under

the

FLSA

and

the

NYLL,

without

a

tip

credit

allowance;
(3) plaintiffs Inclan and Soltani are each entitled to
statutory damages for improper tip notice credit under the
WTPA of $50 per work week, from February 1, 2012, through
the termination of their employment;
(4) plaintiffs are each entitled to statutory damages
for improper pay statements under the WTPA of $100 per work
week,

from

April

9,

2011,

through

the

end

of

each

plaintiff’s employment, not to exceed $2,500 per plaintiff;
(5) plaintiffs are entitled to unpaid spread-of-hours
premiums under the NYLL where applicable;
(6)
under

the

plaintiffs
FLSA

or

are
NYLL,

entitled
as

to

liquidated

applicable,

but

damages

not

to

be

awarded cumulatively;
(7)

defendants

NYHG

and

Mirchandani

will

be

held

jointly and severally liable for damages under both the
FLSA and the NYLL; and
(8) the claims against defendant RHI are dismissed.

44

Additionally, we note that some of the materials submitted
with the Court’s courtesy copies of plaintiffs’ motion papers
have

not

been

filed,

electronically

or

otherwise,

although

plaintiffs did not request leave to proceed in this manner.
ECF Doc. No. 81-1 (“ALL EXHIBITS REDACTED ON ECF”).

See

It is

improper not to make a full public record.

See Lugosch v.

Pyramid

(2d

Co.

of

Onondaga,

435

F.3d

110,

121

Cir.

2006)

(“[D]ocuments submitted to a court for its consideration in a
summary judgment motion are -- as a matter of law -- judicial
documents
under

to

both

which
the

a

strong

common

law

presumption
and

the

of

access

First

attaches,

Amendment.”).

Plaintiffs’ counsel is referred to Rule 5.2 of the Federal Rules
of Civil Procedure and Section 21 of this Court’s Electronic
Case Filing Rules and Instructions, and plaintiffs’ counsel is
directed to file the supporting exhibits via ECF forthwith.

The

Court would not object to the redaction of home addresses and
social security numbers.
Finally, counsel are directed to appear for a conference
before the Court on April 16, 2015, at 2:30 p.m., to discuss the
resolution of this case by settlement or trial.
IT IS SO ORDERED.

45

Dated:

New York, New York
March 26, 2015

NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE

46

Copies of the foregoing Memorandum and Order have been mailed on
this date to the following:
Attorney for Plaintiffs

C.K. Lee, Esq.
Lee Litigation Group, PLLC
30 East 39th Street, 2nd Floor
New York, NY 10016
Attorneys for Defendants

Marshall B. Bellovin, Esq.
Evan E. Richards, Esq.
Ballon Stoll Bader & Nadler, P.C.
729 Seventh Avenue, 17th Floor
New York, NY 10019

47