Chen et al v. Kaijou Restaurant et al
Filing
92
OPINION & ORDER re: 74 FIRST MOTION for Summary Judgment (Refiled). filed by Margaret H. Liu, 62 MOTION for Summary Judgment //Plaintiffs' Motion for Partial Summary Judgment as to Defendant Margaret H. Liu. filed by Zhen Rong Lin, Qin Chen, Yao Fu, Zai Song Chen. Given genuine disputes as to material facts, summary judgment cannot be granted and the cross-motions for summary judgment are DENIED. The parties are directed to appear at a conference scheduled for Wednesday, February 10 at 10:45 am, in Courtroom 14C. The Clerk is directed to terminate the motions at Docket 62 and 74. (As further set forth in this Order), ( Status Conference set for 2/10/2016 at 10:45 AM in Courtroom 14C, 500 Pearl Street, New York, NY 10007 before Judge Paul A. Crotty.) (Signed by Judge Paul A. Crotty on 1/21/2016) (lmb)
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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!LDA!E FILED:
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QIN CHEN, ZAI SONG CHEN, YAO FU,
and ZHEN RONG LIN,
13 Civ. 8968 (PAC)
Plaintiffs,
-against-
OPINION & ORDER
KAIJOU RESTAURANT, et al.
Defendants.
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HONORABLE PAUL A. CROTTY, United States District Judge:
Plaintiffs Qin Chen, Zai Song Chen, Yao Fu, and Zhen Rong Lin claim their former
employer Kaijou restaurant, and various other corporate entities and individuals, violated
minimum wage and overtime requirements of the Fair Labor Standards Act ("FLSA") and the
New York Labor Law ("NYLL"). Plaintiffs and Defendant Margaret Liu, a minority owner of
Kaijou, cross-move for summary judgment, pursuant to Fed. R. Civ. P. 56, on whether Liu was
Plaintiffs' "employer" as defined by the FLSA and the NYLL. Since there are genuine disputes
as to material facts, both motions are DENIED.
Kaijou was a Japanese restaurant in Battery Park City, which operated from April2007 to
August 2012. Pl. 56.1 Stmt, Dkt. 65 ,-[,-[ 1, 4, 12. Qin Chen and Yao Fu worked as waiters, and
Zai Song Chen and Zhen Rong Lin as deliverymen. Id. ,-[,-[ 13, 16, 20, 25. When Kaijou opened,
Liu was a shareholder ofMJK Restaurant, Inc. , the parent which owned the restaurant. Id. ,-[ 3.
Liu became a minority owner of the restaurant, investing approximately $100,000 over the years.
Id. ,-[,-[ 2, 3, 30, 32. Liu maintained an ownership share until Kaijou closed in August 2012. Id. ,-[
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54. The parties dispute the extent ofLiu's involvement in Kaijou's management and operations.
Summary judgment is appropriate where "the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.
R. Civ. P. 56( a). The Court "resolve[s) all ambiguities and draw[s] all reasonable inferences in
the light most favorable to the nonmoving party." Summa v. Hofstra Univ., 708 F.3d 115, 123
(2d Cir. 2013). The Court grants summary judgment only where "the record taken as a whole
could not lead a rational trier of fact to find for the non-moving party." Smith v. Cty. ofSuffolk,
776 F.3d 114, 121 (2d Cir. 2015) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475
u.s. 574, 587 (1986)).
Liu may be personally liable to Plaintiffs under the FLSA and NYLL, but only if she was
their "employer" under the statutes. See Irizarry v. Catsimatidis, 722 F.3d 99, 102 (2d Cir.
2013). "[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." I d. at 104
(internal quotation marks omitted). The FLSA is not helpful in defining "employer," since it
uses the very word it seeks to define: "'Employer' includes any person acting directly or
indirectly in the interest of an employer in relation to an employee." I d. at 103 (quoting 29
U.S.C. § 203(d)). But the Second Circuit has established four factors to determine the
"economic reality" of an employment relationship: "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. " Id. at 105 (quoting Carter v. Duchess Comm. Col!., 735 F .3d 8, 12 (2d
Cir. 1984)).
The Second Circuit has cautioned that " [o]wnership, or a stake in a company, is
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insufficient to establish that an individual is an 'employer"'; the individual must "possess control
over a company's actual 'operations' in a manner that relates to a plaintiffs employment." !d. at
109, 111 . But operational control need not be exercised constantly for an individual to be liable;
" [c]ontrol may be restricted, or exercised only occasionally, ... since such limitations on control
do not diminish the significance of its existence." !d. at 110 (quoting Herman v. RSR Sec. Servs.
Ltd., 172 F.3d 132, 139 (2d Cir. 1999)). At bottom, the analysis depends on "the totality of the
circumstances." !d. at 111.
"The NYLL defines 'employer' as ' any person ... employing any individual in any
occupation, industry, trade, business or service' or 'any individual ... acting as employer."' !d.
at 11 7 (quoting N.Y. Lab. Law§§ 190(3), 651(6)). While the New York Court of Appeals has
not addressed whether the tests for "employer" status are the same under the FLSA and NYLL,
"district courts in this Circuit have interpreted the definition of employer under the [NYLL]
coextensively with the definition used by the FLSA." Schear v. Food Scope Am., Inc., 297
F.R.D. 114, 134 (S.D.N.Y. 2014) (internal quotation marks omitted). A coextensive
interpretation is appropriate here because any difference between the two definitions "would be
immaterial to the facts of this case." !d.
There is evidence in the record from which a rational factfinder could find that Liu was
Plaintiffs' "employer." All four Plaintiffs affirm that Liu was often in the restaurant and
frequently spoke with them and other staff, giving comments about how they were doing their
job. Q. Chen Aff., Dkt. 64-1 Ex. 4 ~~ 19-22; Z. Chen Aff., Dkt. 64-1 Ex. 5 ~~ 15-1 7; Fu Aff.,
Dkt. 64-1 Ex. 6 ~~ 30-32; Lin Aff., Dkt. 64-1 Ex. 7 ~~ 45, 57-59. Based on those experiences,
Plaintiffs viewed Liu as their "boss" and ultimate supervisor. Q. Chen Aff. ~~ 18, 28, 51; Z.
Chen Aff.
~~
4, 14, 18; Fu Aff.
m28-29,36, 41 ; Lin Aff. ~~ 25, 33.
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Qin Chen affirms that Liu
gave guidance to Paula, Chen' s immediate supervisor, regarding waitresses' schedules and
directed Chen and the other waitresses to wear a particular dress as their uniform. Q. Chen Aff.
~~
13 , 14, 81-87. Several Plaintiffs also describe an incident in August 2010 in which they
complained to Liu about Raymond Yau, a manager at Kaijou at the time. Q. Chen Aff. ~~ 62-66;
Z. Chen. Aff. ~ 20-21; Fu Aff. ~ 60. After the conversation, Liu came to the restaurant and spoke
with Yau. Q. Chen Aff. ~~ 67-68. Plaintiffs state that soon thereafter Y au was fired, and Liu
announced that he would be replaced by Harvey Xu. Q. Chen Aff.
Fu Aff.
~~
~~
78-79; Z. Chen. Aff.
~
22;
61-63.
But there is other evidence which points in a different direction, so that a rational
factfinder could find that Liu was not Plaintiffs' " employer." Raymond Yau affirms that Liu had
no involvement in the restaurant's operations and had no input or control over schedules and
compensation. Yau Decl., Dkt. 78
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4. Henry Xu (the manager who replaced Yau) testified that
Liu was not involved in restaurant operations, never talked to the other owners about
management decisions, and did not play a role in supervising Plaintiffs. Xu Dep., Dkt. 77-1 at
19, 21, 62, 74, 87. Liu herself affirms that she was never consulted about matters pertaining to
management, including hiring and firing of managers and employees, work schedules, or
compensation. Liu Decl., Dkt. 76 ~ 10. All three state that Liu did not maintain employment
records. Yau Decl.
~
4; Xu Dep. at 19; Liu Decl. ~ 11.
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Given genuine disputes as to material facts, summary judgment cannot be granted and the
cross-motions for summary judgment are DENIED.
The parties are directed to appear at a conference scheduled for Wednesday, February 10
at 10:45 am, in Courtroom 14C. The Clerk is directed to terminate the motions at Docket 62 and
74.
Dated: New York, New York
January 21, 2016
SO ORDERED
PA(f:.~$TY
United States District Judge
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