Hernandez et al v. Gonzalez et al
Filing
84
OPINION & ORDER: The Court hereby directs the parties to submit revised proposed damages calculations consistent with this Opinion. The Court hereby sets the following schedule for such submissions: By June 17, 2016, plaintiffs shall provide a lett er to defendants (but not then filed on ECF) itemizing, by plaintiff and by claim, plaintiffs' proposed damages calculation and explaining, clearly and with specificity, the basis for each calculation. By June 24, 2016, defendants shall provid e a letter to plaintiffs stating whether they have any objections to any of plaintiffs' proposed damages calculations, and if so, explaining, clearly and with specificity, the basis for each point of disagreement, and stating (and explaining the basis for) defendants' contrary calculation. In the event defendants disagree as to any aspect of plaintiffs' damages calculation, the parties are directed to meet and confer to attempt to resolve any discrepancies. By June 30, 2016, either (1) the parties shall jointly submit a proposed damages calculation, or (2) plaintiffs shall file its proposed damages calculation, in which case defendants shall file any opposition by July 6, 2016, and plaintiffs shall file a reply by July 12, 2016. (As further set forth in this Order.) (Signed by Judge Paul A. Engelmayer on 6/9/2016) (kgo)
worked as a cook. Plaintiffs allege that the restaurant and its managers, defendants Jude
Rodrigues, Chad Leo, and Premendra Chaouhan, violated the FLSA and/or the NYLL by failing
to pay them statutorily required minimum and overtime wages and spread-of-hours pay, failing
to provide them with required wage notices and statements, and requiring the delivery workers to
provide their own tools of the trade, specifically, bicycles and related equipment that they used to
make deliveries. Plaintiffs seek back pay, liquidated damages for the minimum wage, overtime,
and spread-of-hours claims (as well as prejudgment interest on the spread-of-hours claims),
statutory penalties for the wage notice and statement violations, and damages for the cost of
providing their own tools of the trade.
The parties tried the case before the Court on September 21 and 22, and October 13,
2015.2 Each witness’s direct testimony was received in the form of a sworn declaration; 3 crossexamination was live. Plaintiffs, none of whom speaks English as his primary language, each
testified with the assistance of a translator. Defendants called eight witnesses, including the
three defendants and five current or former Spice Symphony employees. These witnesses
testified without the assistance of a translator. Post-trial memoranda, including proposed
damages calculations, were fully submitted on October 30, 2015. Dkts. 76 (“Def. Br.”), 77 (“Pl.
Br.”).
For the reasons set forth below, the Court finds that Spice Symphony, Rodrigues, Leo,
and Chaouhan violated the minimum wage, overtime, tools of the trade, spread-of-hours, and
wage notice and statement provisions of the FLSA and NYLL. On the basis of these violations,
2
“Tr.” refers to the transcript of the trial.
3
Several of the declarations were misnumbered such that there were pairs of paragraphs bearing
the same number. The Court will simply cite to the paragraph number listed in the declarations,
as the context makes clear to which paragraph the Court is referring.
2
the Court awards plaintiffs back wages, costs for tools of the trade, liquidated damages,
prejudgment interest on the spread-of-hours claims only, and statutory penalties.
FINDINGS OF FACT
I.
The Parties
A.
Defendants
JRPAC, d/b/a Spice Symphony, is a corporation organized and existing under New York
State law, which maintains its principal place of business at 182 Lexington Ave., New York, NY
10006. Dkt. 47 (“Joint Stip. of Fact”), ¶ 4. Spice Symphony operates an Indian restaurant,
known by the same name and located at 182 Lexington Ave, New York, NY 10006. Joint Stip.
of Fact ¶ 3; Tr. 383 (Chaouhan). The restaurant opened in September 2012. Tr. 372 (Chaouhan);
Romero Decl. ¶ 7. It is about 800 square feet in size, with 16 tables in the dining room; its
kitchen is approximately 200 square feet. Rodrigues Aff. ¶ 2, Leo Decl. ¶ 2, Chaouhan Aff. ¶ 2.
Spice Symphony had annual sales exceeding $500,000 in the years 2013 and 2014, and
the employees of Spice Symphony regularly used ingredients and other items that traveled or
were produced in interstate commerce. Joint Stip. of Facts ¶¶ 5–6.
At all relevant times, Spice Symphony was open between 11 a.m. and 11 p.m. Sundays through
Thursdays, and between 11 a.m. and 11:30 p.m. on Fridays and Saturdays. Rodrigues Aff. ¶ 2;
Leo Decl. ¶ 2; Chaouhan Aff. ¶ 2.
Chaouhan is a manager of JRPAC. Chaouhan Aff. ¶ 1. He hired Romero. Tr. 372
(Chaouhan). The other plaintiffs were hired by Leo, although Chaouhan finalized their pay
arrangements and had final say over their pay. Tr. 356–57 (Leo). Chaouhan initially worked full
time at the restaurant and maintained its records, but beginning in February 2013, he began to
attend the restaurant only in the evenings and turned over responsibility for its records to Leo.
3
Tr. 373 (Chaouhan). Chaouhan was one of the managers who paid the delivery workers their
tips at the end of the day. Tr. 241–42 (Rodrigues).
Leo was a manager of JRPAC during the relevant period. Leo Decl. ¶ 1. He hired all
plaintiffs except for Romero, and had initial conversations with plaintiffs regarding their pay.
Tr. 356–57 (Leo). In February 2013, Leo took over responsibility for maintaining the records of
Spice Symphony from Chaouhan; at some later point, this responsibility was taken over by
Rodrigues. Tr. 373 (Chaouhan). Leo was generally present in the restaurant during all hours it
was open six days per week, and was responsible for monitoring employees’ work hours and
schedules, and assigning them their job responsibilities. Tr. 259 (Chaouhan), 344–48 (Leo). Leo
was the other manager who paid the delivery workers their tips at the end of the day. Tr. 241–42
(Rodrigues).
Rodrigues is JRPAC’s President. Rodrigues Aff. ¶ 1. He was responsible for
maintaining Spice Symphony’s books and records, and for paying plaintiffs, after he took over
that responsibility from Leo. Tr. 373 (Chauohan). Rodrigues maintained the books and records,
and paid plaintiffs, according to hours-worked information that Leo and Chaouhan gave him. Tr.
330 (Rodrigues). Rodrigues was generally present in the restaurant only on Tuesdays. See Tr.
261 (Rodrigues).
B.
Plaintiffs
Hernandez, Marco, Romero, Rodriguez, Rosales, and Gonzalez were employees of
JRPAC. Joint Stip. of Fact ¶ 2.
On June 10, 2014, plaintiffs filed this lawsuit. Joint Stip. of Fact ¶ 1; Dkt. 2. On
November 11, 2015, each filed a consent to join the lawsuit as a party plaintiff. Dkts. 78–83.
Four plaintiffs, Hernandez, Marco, Rodriguez, and Gonzalez, worked as food delivery
workers at Spice Symphony. Hernandez Decl. ¶ 7; Marco Decl. ¶ 9; Rodriguez Decl. ¶ 10;
4
Gonzalez Decl. ¶ 7. The Court finds that, as each of the four testified, in addition to their
delivery work, each also regularly engaged in other tasks. Some were related to their delivery
duties, such as preparing sauces in small containers to be placed in delivery packages; others
were not, including taking out the garbage, breaking down cardboard boxes, stocking food in the
basement and bringing food from the basement to the kitchen, sweeping and mopping the
restaurant, and cleaning the kitchen. See Hernandez Decl. ¶ 8; Marco Decl. ¶ 10; Rodriguez
Decl. ¶ 11; Gonzalez Decl. ¶ 8; Leo Decl. ¶ 13 (acknowledging that delivery workers spent up to
one hour each day bringing things from the basement to the kitchen, cleaning up the basement,
and mopping the kitchen and taking out the garbage); Chaouhan Aff. ¶ 14 (same); Rodrigues
Aff. ¶ 14 (same). The Court finds that while the delivery workers, during the course of their
employment, spent some time preparing food, such as by cutting vegetables or peeling shrimp
and onions, such activities were limited and sporadic. The Court bases this finding on the
credible testimony of defendants that the preparation of food, including chopping, requires a
particularized set of skills so that the food cooks evenly and properly, and that therefore it was
the cooks, not the delivery workers, who generally did such work. Tr. 358 (Leo). 4
The Court finds that plaintiff Romero worked as a food preparer and also oversaw the
work of the delivery workers, including by acting as a dispatcher for these workers, at Spice
Symphony. Romero Decl. ¶ 8; Tr. 108. While defendants initially declared that he was a
dishwasher, Rodrigues Aff. ¶ 2; Leo Decl. ¶ 2; Chaouhan Aff. ¶ 2, Romero credibly denied that
characterization (while acknowledging that he sometimes washed dishes), Tr. 107–08, and
4
For the reasons that follow, the Court does not, and need not, make findings with regard to the
modest amount of time plaintiffs spent on non-delivery activities each day. See infra note 24.
5
defendants ultimately acknowledged, based on plaintiffs’ uniform testimony, that Romero
oversaw the delivery workers’ work, Def. Br. 4–5, 18 (collecting plaintiffs’ testimony).
Plaintiff Rosales worked as a cook at Spice Symphony. Rosales Dec. ¶ 9; Tr. 135.
II.
Recordkeeping and Documentary Evidence
The Court finds that, during the relevant period, defendants failed to make, keep, and
preserve complete and accurate records of the hours plaintiffs worked, but did keep accurate
records of the wages paid to plaintiffs, to the extent that the records produced address the period
of time the Court finds plaintiffs worked. See infra section III. This finding is based principally
on the Court’s close analysis of the purported wage and hour records defendants have produced,
but also on plaintiffs’ credible testimony that they worked hours not reflected in the records
produced by defendants.
Defendants produced four primary types of records containing information about
plaintiffs’ hours worked. First, defendants produced printouts, in spreadsheet format, of what
defendants stated was their pay register. Ex. A (“Pay Register”). The header of the Pay Register
lists the restaurant’s name and address, as well as the date, “3/01/2015.” The header for each
plaintiff’s payroll register says “Spice Symphony – Payroll Register,” and lists the employee’s
name, ID number, and job title, which for the delivery workers says “Tip Employee Delivery.”
For Gonzalez, there is also a notation “PT,” presumably indicating that he was a part-time
employee. The rows in the Pay Register each cover a specific period of time, and the columns
contain information purporting to show the days worked, regular hours worked, “OT” [overtime]
hours worked, regular and overtime wage rate per hour, regular and overtime wages paid, tips
earned, and the pay date. Plaintiffs were never shown the Pay Register. Tr. 330 (Rodrigues).
6
Second, defendants produced photocopies of pages from a physical notebook or journal
which plaintiffs signed in order to receive their weekly pay. Ex. A (“Pay Journal”). 5 The Court
addresses the contents of the Pay Journal below.
Third, for certain plaintiffs—Hernandez, Rodriguez, and Rosales—defendants produced
time sheets, which were handwritten charts purporting to indicate the hours worked each day and
each week by plaintiffs, as well as the pay plaintiffs received, both from the restaurant and, for
the delivery workers, from tips. Exs. B & T (“Time Sheets”).
Fourth, defendants produced tip receipts, which were signed by plaintiffs, indicating the
amount of tips the delivery workers received. Ex. C (“Tip Receipts”). The Tip Receipts have a
date and time on them indicating the time and date they were printed. Tr. 242–43, 273
(Rodrigues).
Defendants testified that the records were created as follows. Leo recorded the hours
plaintiffs worked on white sheets of paper, marking down the time each day that plaintiffs began
and ended their work, as well as when they would start and end breaks during the day. Leo
provided these white sheets to Chaouhan on Mondays; on Tuesdays, Chaouhan and Rodrigues
used the white sheets to input the data into the time sheets. Rodrigues then inputted the data
from the time sheets into the Pay Register to calculate plaintiffs’ wages. This process took place
weekly. Tr. 236–37 (Rodrigues testifying that he inputted the data into the pay register weekly
from the Time Sheets and Pay Journal), 345–48 (Leo testifying about the process), 382–83
(Chaouhan same). The white sheets containing the original start and stop times for plaintiffs’
5
At trial, defendants introduced the physical copies of these journals, Exs. R & S, to which
witnesses were asked to refer in their testimony.
7
working hours and break times were discarded after the information was transferred into the
Time Sheets. Tr. 346 (Leo), 382–383 (Chaouhan).
The Court credits as accurate the amount of money paid to plaintiffs, by defendants, as
indicated in the Pay Journal and Tip Receipts. That is because plaintiffs effectively adopted this
information as accurate. As to the Pay Journal, plaintiffs were required to sign it weekly to
receive their weekly pay. See infra section IV.A. And at trial, all plaintiffs—except
Hernandez 6—acknowledged that the signatures in the Pay Journal were theirs, and that they had
been paid the amount listed in the Pay Journal alongside their signatures. Pl. Br. 8 (plaintiffs
concede they were paid the amounts listed in the Pay Journal). Plaintiffs also were required to
sign their tip receipts to receive their tip pay, which they did daily. Plaintiffs generally
acknowledged as authentic their signatures on the tip receipts, and that they had been paid the
amount of tips listed on the receipts. See infra section IV.A. Because the Court finds accurate
the amounts indicated in the Pay Journal and on the tip receipts, the Pay Register is also accurate
to the extent that it replicates or aggregates this data. 7
6
The Court does not credit Hernandez’s testimony that he is unable to authenticate the signatures
in the Pay Journal bearing his name for those entries indicating a pay amount other than the $250
per week he declared that he received. Tr. 183–89. The Court finds that these were Hernandez’s
signatures. The Court discounted Hernandez’s overall credibility, to a degree, as a result of his
evasiveness on this point. Other plaintiffs testified, credibly, that discrete signatures alongside
certain of their pay periods were not theirs and appeared to have been filled in by others, while
not making this claim globally or disputing that the amount of money listed as paid in the Pay
Journal alongside each week accurately reflects the amount they were paid. See, e.g., Tr. 78–80
(Rodriguez testifying that most were his signatures).
7
The Court is presently aware of a few discrepancies between the Pay Journal and Tip Receipts,
on the one hand, and the Pay Register, on the other. See, e.g., Pay Register and Pay Journal for
Rosales for pay periods beginning July 7 and July 14, 2014 (listing in Pay Register payment of
standard weekly wages, while Pay Journal reflects additional wages); Pay Register and Pay
Journal for Gonzalez for pay periods beginning January 6, 2014 (Pay Register fails to include
pay data for this period). The Court accepts the data in the Pay Register, a derivative record,
8
Significantly, the Court finds that, at the times that plaintiffs signed the Pay Journal, it
contained only a subset of the information that appeared in it as of the time of trial. Plaintiffs’
testimony was generally consistent that, at the time they signed the Pay Journal, it contained their
names, the date period for which they were being paid, the date on which they were being paid,
and the amount they were being paid. See, e.g., Tr. 80 (Rodriguez testifying that the Pay Journal
listed the date, the amount paid, and his signature).
The Court does not, however, credit that, at the time it was signed, the Pay Journal
contained other handwritten notations—notations plaintiffs deny were present at the time they
signed it. These notations fall into several categories. First, there are notations as to each
plaintiff’s purported hourly pay rate. These rates are expressed in dollar amounts following an
“@” symbol, generally with one dollar amount following the words “Reg. Hrs. @” and another
following “OT Hrs. @.” Second, there are notations, in the form of tiny handwritten numbers,
preceded by the letters “R” and “O” (“R&O Notations”), written either in the margins of the
journal, or in between the columns reflecting the amount of pay paid to the plaintiff in question
that week. These small numbers, defendants testified, were meant to capture the specific regular
and overtime hours worked by the delivery worker plaintiffs that week. Tr. 327 (Rodrigues).
Third, for Hernandez and Rodriguez, at the top of the journal page were block letters indicating
“TIP EMPLOYEE.”
For two independent reasons, the Court rejects as incredible defendants’ claim that these
three categories of markings were present at the time plaintiffs signed the Pay Journal. First, by
their presentation and appearance, the markings, particularly the R&O Notations, suggest that
only insofar as it accurately captures data in the Pay Journal records that plaintiffs saw and
adopted.
9
they were inserted at a later date, to provide ostensible documentary support for a defense that
plaintiffs’ hours were less than they claim in this lawsuit and that plaintiffs had agreed to work at
the hourly pay rates indicated. The R&O Notations are crammed unnaturally into the margins of
the Pay Journal. Unlike the categories of date, pay amount, and signature, there is no column
header in the journal entries for these notations. Similarly, the markings indicating “Tip
Employee” and the rates of pay for plaintiffs are shoehorned into tight crevices and penned
awkwardly. They are situated either at the very top of the page, inexplicably above the preprinted header reading “Notes/Memos” in the journal, or crammed underneath it.
Second, plaintiffs’ near uniform—and credible—testimony was that the Pay Journal
contained their name, the date, and the amount they were paid before they signed, but that it did
not contain the other markings, a point on which they were emphatic. See, e.g., Tr. 80–81
(Rodriguez testifying that the R&O notations, the indications that he was a tip employee earning
specified regular and overtime rates were not present when he signed the Pay Journal), 152–54
(Rosales testifying that the Pay Journal listed the date and the amount he would be paid, and that
he was sure that the hourly rates and the R&O notations were not there when he signed). 8
The Court also does not credit the accuracy of the Pay Journal notations, Pay Register
data, or Time Sheet data purportedly reciting the number of hours—regular hours and overtime
hours—that plaintiffs worked during a given pay period. The Court does not credit defendants’
testimony that Leo’s practice was to write down, accurately, plaintiffs’ start and end times, and
the start and end time of plaintiffs’ breaks each day, and to use that information to supply the
8
Marco answered affirmatively the question: “Did you see anything else written, little numbers
and letters on the left-hand side?” Tr. 314. However, Marco testified remotely via video
conference, and it was not clear that he had a photocopy of any part of the Pay Journal in front of
him when he answered the question. See Tr. 313. The Court therefore finds that his testimony
does not support that the R&O notations were in the Pay Journal at the time he signed it.
10
data to the Pay Register, Pay Journal, and Time Sheets. The Court discredits this testimony, and
finds the records inaccurate, for two related reasons.
First, although defendants claim to have precisely recorded plaintiffs’ hours, the Pay
Register and Time Sheets show total weekly, and daily, hours for the delivery workers that are
implausibly identical, week in and week out. Leo testified that while Romero’s and Rosales’s
schedules and hours were consistent and set, the delivery workers’ hours (including their start
and end times), unsurprisingly, would vary. Tr. 347–48. Notwithstanding this, the Pay Register
reflects vast numbers of weeks in which a particular employee is reported to have worked the
identical number of hours, down to the tenth of an hour. Thus, for example, the Pay Register
reports that in 13 weeks, Rodriguez worked 46.6 hours, and in eight weeks, he worked 41.1
hours; that in 13 weeks, Hernandez worked 44.4 hours, and in nine weeks, he worked 41.1 hours.
There is no persuasive explanation in the record for this metronomic consistency. Leo attempted
to explain these results by stating that he rounded up the times plaintiffs worked—he gave as an
example rounding 11:20 p.m. to 11:30 p.m. Tr. 347. But such rounding would not produce such
peculiar, let alone recurrent, weekly totals.
The Time Sheets similarly reflect implausible results. They report identical numbers of
hours worked—again, down to the fraction of an hour—on a daily basis, despite the fact that
plaintiffs and defendants all testified that the delivery workers’ workdays ended at varying times
depending on the need on a given day for their services, and despite the fact that the restaurant
was open (and plaintiffs thus worked) longer hours on Fridays and Saturdays. See, e.g., Time
Sheets for Rodriguez (showing 6.8 hours worked each day for every week he worked a total of
11
41.1 hours, and 7.7 hours each day for every week he worked a total of 46.6 hours, 9 with no
variation between Sundays–Thursdays and Fridays & Saturdays).
Second, as mentioned above, the odd-lot, fractionated total hours that these records report
for the restaurant’s workers are bizarre and unexplained. See also, e.g., Pay Register for Romero
(showing he worked 46.6 hours nearly every week); Pay Register for Rosales (same); Pay
Register for Gonzelez (working 25 hours per week most weeks, and 20.8 hours per week in
seven weeks). And Rodrigues himself, who maintained the books, struggled to explain them. In
his testimony, he claimed to have difficulty deciphering some of the entries in the time sheets,
and was unable to account for whether the odd decimal points represented minutes or hundredths
of an hour. Tr. 279–83 (Rodrigues addressing time sheet entries for Rodriguez showing 8.23
hours per day, every day, for a full week, which he testified signified 8 hours and 23 minutes,
whereas entries showing 6.25 hours worked each day a few weeks prior signified 6 and a quarter
hours); 377–80 (Chaouhan testifying that 7.76 hours signified seven hours and 46 minutes, but
agreeing with Rodrigues that 7.7 hours in the time sheets signified seven hours and seven
minutes). Just as these odd increments cannot be explained by the rounding purportedly
performed by Leo, they cannot be accounted for by Rodrigues’s statement that he did not want to
shortchange anyone. Tr. 280 (Rodrigues explaining that for 23 minutes of work, he gave
workers credit for 30 minutes). That explanation does not make sense.
There is, however, an obvious and persuasive contrary explanation. The records’
persistent use of odd-lot fractional hours alongside generally consistent weekly compensation
figures that are reported in whole numbers powerfully suggests that the Time Sheets and Pay
9
The Court notes that the math does not actually work for these hours, as six days of 6.8 hours
worked yields 40.8 hours, not 41.1, and six days of 7.7 hours yields 46.2 hours worked, not 46.6.
12
Register (and corresponding notations in the Pay Journal) were fabricated after the fact. This
pattern suggests that the number of hours purportedly worked each week were derived
retrospectively, by dividing the total amount of the employee’s weekly wages by a fictitious
hourly wage. This practice of jerry-rigging records, after the fact, in an attempt to deceive a
factfinder into finding that fixed weekly pay amounts had been paid in compliance with statutory
minimum and overtime wage requirements is, regrettably, all too familiar in litigated FLSA and
NYLL cases. See, e.g., Solis v. Cindy’s Total Care, Inc., No. 10 Civ. 7242 (PAE), 2012 WL
28141, at *8 (S.D.N.Y. Jan. 5, 2012) (describing this practice as the “backing-in” method).
Beyond these problems, as discussed further, infra section VI, the Court also finds that
the data concerning hours worked as reported in the Pay Register, Time Sheets, and Pay Journal
are contrary to plaintiffs’ credible and consistent testimony as to the hours they worked at the
restaurant. 10
For all those reasons, the Court finds that the Pay Journal R&O Notations, Pay Register,
and Time Sheets are inaccurate and unreliable in conveying the number of hours plaintiffs
worked at the restaurant. It follows—and the Court addresses this point further infra section
IV.B—that these records are equally unreliable to the extent they purport to record plaintiffs’
regular and overtime hourly rates of pay. Plaintiffs credibly testified to the contrary—that they
were paid sums per week that were generally constant, and that they were never paid according
to an agreed-upon hourly rate.
10
Similarly, the Court does not credit the Pay Register’s indication of the number of days
Gonzalez worked each week, as it is contrary to the Court’s finding that he generally worked six
days per week—although occasionally he worked fewer days. See infra section VI.A.1; see also
Tip Receipts for Gonzalez (showing, for example, he worked six days between 9/22/13 and
9/28/13, including 9/28/13, despite the Pay Journal and Pay Register not providing a date range
that includes 9/28/13).
13
A final category of records related to pay which Spice Symphony produced for trial was
copies of checks that the restaurant used to pay Rosales during the last three months of his
employment (July–September 2014), and to pay him a $400 advance for work to be performed.
Ex. D; Tr. 153, 158, 161–62. The memo portion of these checks presents several categories of
information: the dates for which Rosales was being paid; occasionally, the number of days
worked; and the description of Rosales as a “Part Time Employee,” although, as discussed infra,
Rosales was not a part-time employee. See infra VI.A.3; Tr. 245–46 (Rodrigues was unable to
explain why he repeatedly made the “mistake” of indicating that Rosales was a part-time
employee on the checks). The memo portion contained the inscription, “Responsible [or Resp.]
For All Taxes.” Although Rodrigues testified that the restaurant was paying taxes on the wages
it paid plaintiffs, it did not withhold taxes for plaintiffs’ income. Tr. 246–47. There was no
testimony suggesting that Spice Symphony provided plaintiffs with tax documents reflecting
their pay and/or hours worked. See Rodriguez Decl. ¶ 21 (declaring that he never received a
Form W-2); Marco Decl. ¶ 27 (same); Romero Decl. ¶ 17 (same); Rosales Decl. ¶ 21 (same).
The Court finds that the notation to the effect that Rosales was “[r]esponsible for all taxes,”
whatever Rodrigues’s reasons for so writing, was devoid of legal significance and factually
inaccurate.
III.
Dates of Employment
The parties dispute the dates that a number of plaintiffs began working for Spice
Symphony. As explained below, the Court generally credits (with the exception of the testimony
of Hernandez) plaintiffs’ testimony as to their start dates, and does not credit defendants’
contrary testimony.
Marco worked for Spice Symphony from March 2013 until September 20, 2013, and then
from April 28, 2014 until May 13, 2014. Marco Decl. ¶ 8; Pay Journal; Pay Register; Tip
14
Receipts. While Marco expressed some uncertainty about the dates of his employment with
Spice Symphony during his live testimony, he was consistent that he began work in March 2013.
Tr. 301–03.
Rodriguez worked for Spice Symphony from April 2013 until March 9, 2014, and then
from May 12, 2014 until June 1, 2014. Rodriguez Decl. ¶ 9; Pay Journal; Pay Register; Tr. 72–
74, 84; Ex. 4 (photograph of Cinco de Mayo celebration, May 5, 2013).
Gonzalez worked for Spice Symphony from December 2012 through January 25, 2014.
Gonzalez Decl. ¶ 6; Tr; 52, 55; Pay Journal; Tip Receipts; see also Pl. Br. 9 (adopting month of
January for end date).
Romero worked for Spice Symphony from September 24, 2012 through August 11, 2013.
Romero Decl. ¶ 7; Pay Journal; see also Pl. Br. 13 (adopting Pay Journal for end date).
Rosales worked for Spice Symphony from March 2013 until September 30, 2014.
Rosales Decl. ¶ 8; Tr. 135–36. Although the Pay Journal and copies of checks reflect payments
only for work through September 21, 2014, on September 30, 2014 he received payments for
work up through September 21, as well as an “advance,” suggesting that he was still working at
Spice Symphony at the time. Pay Journal; Ex. D; Tr. 153, 158, 161–62. The Court therefore
credits his declaration that he worked until September 30, 2014. Rosales Decl. ¶ 8.
Defendants claim that Gonzalez, Rodriguez, Rosales and Marco began working for Spice
Symphony at later dates in July 2013: Rodriguez and Rosales on July 1, 2013; Marco on July 10,
2013; and Gonzalez on July 15, 2013. Rodrigues Aff. ¶ 7; Leo Decl. ¶ 7; Chaouhan Aff. ¶ 7.
Defendants base this testimony on their handwritten pay records and their purported memory.
Ex. A; see Tr. 253–55. The Pay Journal records produced, however, begin in July 2013. Id. Yet
several plaintiffs credibly testified that they either were not required to sign a notebook for their
15
pay for some early portion of their tenure at Spice Symphony, Tr. 52 (Gonzalez), or that they
signed, or may have signed, a different notebook when they first started working there, Tr. 57–58
(Gonzalez), 80 (Rodriguez), 151–52 (Rosales). And Rodrigues conceded on cross-examination
that he may have used another notebook before July 2013, but that he was not able to locate it
when asked to produce it for this action. Tr. 253–55. The Court does not credit Rodrigues’s or
the other defendants’ self-serving claim that these four plaintiffs all coincidentally began
working during the period covered by the pay notebooks defendants were able to locate, and not
before.
As for plaintiff Hernandez, the Court finds that he worked for Spice Symphony from
September 1, 2013 until March 4, 2014, and then from April 28, 2014 until June 23, 2014, and
that he worked only a half day on June 23, 2014. Hernandez Decl. ¶ 6; Rodrigues Aff. ¶ 7; Leo
Decl. ¶ 7; Chaouhan Aff. ¶ 7; Pay Journal; Tr. 316–17 (Rodrigues acknowledging June 23). The
Court does not credit Hernandez’s testimony that he began working for Spice Symphony in May
2013. Hernandez Decl. ¶ 6; Tr. 164. For reasons explained further infra section X, the Court
finds Hernandez’s testimony at trial was incredible as to certain points, and the Court declines to
credit his claim as to his start date. Moreover, as to four other plaintiffs (Gonzalez, Rodriguez,
Marco, and Rosales) defendants acknowledged that these plaintiffs began working at least by
July 2013 based on their records covering that point forward, which plaintiffs had an opportunity
to review. There is, however, no documentary evidence that Hernandez worked in July or
August 2013. The Court accordingly does not credit that he worked in May–August 2013.
IV.
Payment
A.
Payment Practices
Plaintiffs received their regular weekly pay on Tuesdays. Tr. 150 (Rosales), 372
(Rodrigues). To receive such pay, plaintiffs signed the Pay Journal. Tr. 150 (Rosales). As the
16
Court has found, at the time the worker signed the Pay Journal, it accurately recited the worker’s
name, the dates for which he was being paid, and the amount.
In addition, each day, the restaurant paid delivery workers the tips earned on deliveries
paid by credit card. Delivery workers received tips, one worker at a time, at or near the end of
their work hours. The Court finds that while sometimes the workers, upon receiving their tips,
stopped work and left the restaurant immediately, on other occasions, they resumed work (e.g.,
cleaning the kitchen). To receive their tips, delivery workers signed a Tip Receipt. The Tip
Receipt listed the date and time the receipt was printed, and the amount of the tip. Plaintiffs
acknowledged that the amount of tip indicated on a Tip Receipt accurately reflected the amount
of tip they received. Tips were paid in cash. Tr. 36–42 (Gonzalez), 95–96 (Rodriguez), 179–81
(Hernandez), 310–11 (Marco).
B.
Pay Rates and Wage Payments
1.
Delivery Workers
The Court finds that Hernandez, Marco, and Rodriguez were generally paid a weekly rate
of pay, although the weekly rate per worker, while generally constant, was not always so. As to
Gonzalez, the Court finds that he was generally paid a fixed daily rate of pay.
The delivery workers each attested that they were paid a fixed weekly rate of pay.
Gonzalez Decl. ¶¶ 13–14 ($175 per week); Rodriguez Decl. ¶¶ 14–16 ($250 per week until
December 2013; $280 per week from December 2013 to March 2014; $300 per week from May
2014 to June 2014); Hernandez Decl. ¶ 18 ($250 per week); Marco Decl. ¶¶ 20–21 ($250 per
week until July 2013, and $250 to $330 per week thereafter). This attestation to the effect that
weekly pay was constant proved an overstatement, as plaintiffs admitted at trial that the Pay
Journal records of cash received were accurate, and the Pay Journal reflects occasional weekly
fluctuations. However, for each worker, the variations in weekly pay were modest: they
17
typically reflected deviations in standard, round-number increments—frequently $25, $30 or
$50—from the worker’s most-frequent weekly pay amount. See, e.g., Pay Journal for Hernandez
(nine entries for $250, 13 entries for $280); Pay Journal for Rodriguez (eight entries for $250, 13
entries for $300); but see Pay Journal for Marco (no generally consistent entries, though there are
only eight total entries).
It is possible that the variations in pay loosely reflected that the worker had worked more
(or fewer) hours in a given week than his norm, justifying a modest upward or downward change
in pay for the week at issue. But, as described earlier, the Court finds that defendants did not
maintain contemporaneous or accurate records of the precise hours that the delivery workers
worked, or make any attempt to assure that weekly pay was keyed to a pre-set hourly rate.
Therefore, the Court rejects defendants’ claim—based on the annotations added after-the-fact to
the Pay Journal as to the workers’ ostensible hours worked and pay rates—that weekly pay for
each worker reflected an hourly rate of $6 per hour, and an hourly overtime rate of $9 per hour,
for each worker. The Court similarly does not credit defendants’ testimony to that effect.
The Court therefore makes the following findings as to the pay that plaintiffs received
while employed at Spice Symphony.
All delivery workers were paid the amounts listed in the Pay Journal for the weeks
covered there.
For the dates as to which the Court has found plaintiff delivery workers were employed,
but as to which there is no corresponding entry in the Pay Journal, the Court finds that Rodriguez
was paid $250 per week (mode payment for early period of employment), and Marco was paid
$250 per week (amount he declared he received).
18
The Court finds that Hernandez was not paid wages for his work for his last two weeks of
work—between June 9 and June 23, 2014. See Pay Journal (no signatures for pay); Tr. 166
(Hernandez testifying that he did not get paid for his last two weeks of work); 317–18
(Rodrigues acknowledging that where there is no signature Hernandez did not receive pay). The
Court finds that his regular weekly salary for those two weeks would have been $300 (the mode
payment amount during Hernandez’s second tour of duty with Spice Symphony).
As to Gonzalez, however, the Court finds that he was paid a fixed daily rate of $25 per
day. Gonzalez’s declaration credited defendants with paying him more generously than did the
Pay Journal. Rather than the $175 per week he declared he received, by far the most common
recorded weekly payments were for $150 or $125. Pay Journal for Gonzalez (nine entries for
$150, seven entries for $125). As discussed further infra section VI.A.1, the Court does not
credit Gonzalez’s testimony that he worked seven days per week, but rather finds that he
generally worked six days per week (like the other delivery workers). Finding that Gonzalez
earned a daily wage of $25 per day best accounts for the uniform variations in his pay of
increments of $25 and the conflicting evidence regarding his schedule. For the dates as to which
the Court has found Gonzalez was employed, but as to which there is no corresponding entry in
the Pay Journal, the Court finds that he was paid $25 for each of six days of work. See Pay
Journal (mode payment $150 per week).
2.
Romero
The Court finds that Romero was paid a fixed weekly salary of $400 per week for the
duration of his employment up through July 21, 2013, and $450 per week from July 22 to August
11, 2013.11 Pay Register; Pay Journal. The Court does not credit Romero’s testimony that he
11
Romero also testified that he occasionally assisted in making deliveries, earning $20–30 in tips
per month. Tr. 112–13.
19
was paid $425 per week between February 2013 and July 2013, because it is inconsistent with
the portions of Pay Journal alongside which he signed for the first three weeks in July 2013. Tr.
118–19 (Romero). The Court finds that this salary was a fixed weekly salary. Contrary to what
the annotations in the Pay Journal indicate, the Court finds this pay did not reflect an hourly pay
rate (the Pay Register reflects a regular pay rate of $8 per hour and $12 per overtime hour, and,
for July 22 to August 11, 2013, regular and overtime rates of $9 per hour and $13.50 per hour,
respectively; the Pay Journal has a notation at the top reflecting a regular rate of $8 per hour and
$13.50 per overtime hour). The Court rejects these notations as post-hoc additions with no basis
in reality for the same reasons it rejected the similar notations as to the delivery workers.
Although Romero was paid a fixed weekly salary, the Court does not credit defendants’
declarations that defendants and Romero “had a clear and mutual understanding . . . that [his]
weekly pay compensation was for all hours worked (whether many or few).” Rodrigues Aff.
¶ 23; Leo Decl. ¶ 22; Chaouhan Aff. ¶ 23. These assertions are conclusory, unsupported by
documentary evidence or a description of the concrete circumstances that purportedly gave rise
to such a “clear and mutual understanding.”
3.
Rosales
The Court finds that Rosales, too, was paid a fixed weekly salary. The Court finds that
Rosales was paid the amounts indicated in the Pay Journal each week, 12 and that he was paid a
fixed weekly rate of $500 per week from July 1 to November 3, 2013, $525 for the week
beginning November 4, 2013; $550 per week from November 11, 2013 to April 6, 2014; $575
per week from April 7 to August 31, 2014; and $650 per week from September 8 to September
30, 2014. Pay Journal. The Court further finds that Rosales was paid a weekly salary of $500
12
Although there is no Pay Journal entry for the week beginning July 21, 2014, the Court credits
the Pay Register that Rosales was paid $527 for that week. See Ex. D.
20
per week from March 2013 until June 30, 2013, during which period the Court has found Rosales
worked but whose wage payments are not reflected in the Pay Journal records. As with the other
workers, the Court does not credit the notations in the Pay Register to the effect that Rosales’s
weekly pay reflected an agreed-upon hourly and overtime rate. And for the reasons stated above
with respect to Romero, the Court does not credit defendants’ declarations that defendants’ and
Romero “had a clear and mutual understanding . . . that [his] weekly pay compensation was for
all hours worked (whether many or few).” Rodrigues Aff. ¶ 23; Leo Decl. ¶ 22; Chaouhan Aff. ¶
23.
The Court finds that Rosales was paid an “advance” of $400 on September 30, 2014, but
that he was not paid his regular wages for his work between September 22 and September 30,
2014. Ex. D; Pay Journal (no entry for September 22 to September 30, 2014).
V.
Notice
A.
Compensation Discussions
The Court here addresses the oral conversations between plaintiffs and defendants
regarding the manner in which plaintiffs would be compensated. This discussion is relevant only
to whether defendants are entitled to claim a tip credit with respect to the delivery workers;
accordingly, the Court addresses only those workers. As the Court has previously found, Leo
hired the delivery workers. Leo had the initial conversations with plaintiffs about their pay when
they were hired, but Chaouhan finalized the pay arrangements with plaintiffs and had the final
say over pay. Tr. 356–57.
The Court finds that, at the time they were hired, the delivery workers were informed that
they would be paid a fixed weekly rate of pay, 13 and that they would receive tips. However, as
13
For Gonzalez, a fixed daily rate of pay.
21
discussed supra section II, the Court does not credit defendants’ testimony, or their purported
documentary evidence, that the parties ever agreed to an hourly rate of pay, let alone that any
plaintiff’s weekly pay was ever calculated based on his hours worked that week. For related
reasons, the Court does not credit Leo’s declaration to the effect that, in the hiring interviews
with all delivery workers, he informed them that they would be paid an hourly rate and an
overtime rate, in addition to tips, which would be used to offset defendants’ minimum wage
obligations. Chad Decl. ¶ 17; Tr. 361–62. That testimony was incredible for several
independent reasons. First, and most significant, Leo purported to have notified plaintiffs of a
compensation system (involving hourly rates of pay) that the Court has found did not exist.
Second, the claim is implausible, unsupported by any contemporaneous documentary evidence,
and was refuted by plaintiffs’ credible testimony. Third, Leo’s two co-defendants suspiciously
attempted to corroborate this account by supplying, using identical words, testimony as to what
was purportedly said by Leo to plaintiffs during their hiring interviews, even though these codefendants were not present for these interviews. See Tr. 320–22 (striking Rodrigues affidavit
testimony as hearsay); 383–87 (same as to Chaouhan, who denied being involved in finalizing
the workers’ pay when they were initially hired, contradicting Leo’s testimony).
Relatedly, the Court finds that plaintiffs were not informed that their tips would be used
to offset defendants’ minimum wage obligations. Gonzalez Decl. ¶ 15 (denying that he was so
notified); Hernandez Decl. ¶ 20 (same); Rodriguez Decl. ¶ 18 (same); Marco Decl. ¶ 23 (same).
The Court finds that Leo informed the delivery workers that the restaurant would pay them a
weekly wage, and that they would receive tips from customers. However, the Court rejects
Leo’s testimony that he informed the workers that these tips would serve as an offset to minimum
22
wage and overtime obligations. Defendants’ non-compliance with wage and hour laws makes it
highly unlikely that Leo was punctilious as to this notice requirement of the law.
Notably, under questioning by the Court, Leo recounted the discussions he purportedly
had with prospective delivery workers as to pay arrangements. He testified: “I would say base
salary would be $6 per hour and then including your tips would cover your entire wage, your
entire salary.” Tr. 362. The Court does not credit as accurate Leo’s statement either that he
notified the workers of a $6 per hour wage or that he told them the “tips would cover your entire
wage, your entire salary.” But even if those words had been used, this inexact formulation
would have been inadequate to communicate to a delivery worker that the tips would serve as an
offset to the statutory minimum-wage entitlement, a concept that Leo’s locution nowhere
mentions. As for Ndiaye, while the Court credits his testimony, as a former delivery worker, that
he received tips and wages from the restaurant, Tr. 337–38, the Court does not credit the aspect
of his declaration, which tracks nearly verbatim defendants’ declarations, to the effect that he
was told that he would receive tips as an offset to defendants’ minimum wage obligations.
Ndiaye Decl. ¶ 9.
B.
Government Poster
Resolving the conflicting testimony on this point, the Court finds that while defendants at
some point posted federal and state Department of Labor (“DOL”) posters in the restaurant, in
English and Spanish, they did not do so during the period when plaintiffs worked at the
restaurant. The Court credits the uniform testimony of plaintiffs on this point. Gonzalez Decl.
¶ 22; Rodriguez Decl. ¶ 25; Hernandez Decl. ¶ 27; Marco Decl. ¶ 31; Romero Decl. ¶ 21;
Rosales Decl. ¶ 25.
Defendants placed into evidence a photograph of posters, in both languages, containing
general information regarding the minimum wage rate, the minimum wage laws, overtime laws,
23
and tip/meal-credit allowance requirements. Ex. E; see also Def. Br. 29 (citing the poster
available at http://www.labor.ny.gov/formsdocs/wp/LS207.pdf as exemplifying the type of
poster which was present in the restaurant, as the text in Exhibit E is not legible). Defendants
and their witnesses also testified that the poster was posted in the kitchen at Spice Symphony.
But the Court does not credit defendants’ testimony that the posters have been posted in the
restaurant’s kitchen at all times since the restaurant opened, and have been updated every time
the minimum wage, or related laws, have changed. Rodrigues Aff. ¶ 10; Leo Decl. ¶ 11;
Chaouhan Aff. ¶ 10; Tr. 247–48. Notably, while defendants’ other witnesses, all current or
former employees, testified that “Department of Labor notices were visibly posted on the
premises,” Arnely Aff. ¶ 3; Ndiaye Aff. ¶3; Nagarajah Aff. ¶ 3; D’Silva Aff. ¶ 3; Jean Aff. ¶ 3;
Shete Aff. ¶ 3 (emphasis added), none provided any detail about the time frame during which
they remember the posters being there. See also Tr. 213–16 (Arnely, a line cook, initially
testified at deposition that he did not recall whether there were posters in the kitchen).
C.
Wage Notice
Defendants did not give plaintiffs a notice, in English or in Spanish, upon their hiring or
anytime thereafter, which contained information regarding their employer’s name, address, and
phone number; the employees’ rates of pay and basis of pay (e.g., hourly, daily, weekly, shift,
piece, salary, or other); the allowances Spice Symphony would be claiming against their
minimum wage; and the employees’ regular pay day. Gonzalez Decl. ¶ 21; Rodriguez Decl.
¶ 24; Hernandez Decl. ¶ 26; Marco Decl. ¶ 30; Romero Decl. ¶ 20; Rosales Decl. ¶ 24.
D.
Wage Statements
Defendants did not provide plaintiffs with a statement, along with their wage pay,
containing information regarding the dates of work covered by that payment; the employee’s
name; the employer’s name, address, and phone number; the employee’s rate of pay and the
24
basis of payment, including the employee’s regular and overtime rates of pay and the regular and
overtime hours worked by the employee during the pay period; gross wages; deductions;
allowances claimed against the employee’s minimum wage; and net wages. As described supra
section II, the Court credits defendants’ testimony that the Pay Journal signed by plaintiffs to
receive their pay contained the employee’s name, the dates covered by the payment, and the
gross wages earned. However, the Court does not credit that the Pay Journal recited the
employee’s rate of pay, the employee’s designation as a tipped employee, or the hours (regular
or overtime) worked by plaintiffs. Moreover, plaintiffs were not provided a separate statement
containing such information, or a copy of the pages of the Pay Journal which plaintiffs signed.
Gonzalez Decl. ¶¶ 18–19; Rodriguez Decl. ¶¶ 21–22; Hernandez Decl. ¶¶ 23–24; Marco Decl.
¶¶ 27–28; Romero Decl. ¶¶ 17–18; Rosales Decl. ¶¶ 21–22.
VI.
Hours Worked
For the reasons stated supra section II, the Court does not credit defendants’ documentary
evidence purporting to record plaintiffs’ hours worked. The Court also does not credit
defendants’ testimony that they routinely locked up the restaurant at 11:15–11:30 p.m. Sundays
through Thursdays, and at 12 a.m. on Fridays and Saturdays, and that restaurant employees
regularly left the restaurant 20–30 minutes before management locked up. Rodrigues Aff. ¶ 9;
Leo Decl. ¶ 9; Chaouhan Aff. ¶ 9; see also Tr. 348–56 (Leo testifying generally regarding
plaintiffs’ hours, though noting that the delivery workers’ hours varied). This claim is contrary
to plaintiffs’ consistent and credible testimony that they often worked beyond those hours.
Gonzalez Decl. ¶ 10; Tr. 18; Rodriguez Decl. ¶ 10; Tr. 90–91; Hernandez Decl. ¶¶ 13–14; Tr.
169–72; Marco Decl. ¶¶ 16–17; Tr. 307–10; Romero Decl. ¶ 10; Tr. 108–09; Rosales Decl. ¶ 10;
Tr. 137–38. It is also impeached by other documentary evidence offered by defendants, namely,
the tip receipts that frequently reflect timestamps after those purported closing times, see e.g.,
25
Tip Receipts for Hernandez (timestamp for 32 out of 88 dates falling on Sunday through
Thursday after 11:30 p.m.); Tip Receipts for Rodriguez (timestamp for 15 out of 27 tip receipts
for dates falling on Fridays and Saturdays after 12 a.m.).
Because there are no accurate records showing the precise times plaintiffs worked each
day, the Court of necessity makes findings regarding plaintiffs’ general work schedules (that is,
when they typically began and ended work each day), and the extent to which plaintiffs received
any breaks during the workday.
A.
General Schedule
1.
Delivery Workers
The delivery workers had a schedule that varied on a day-to-day basis, particularly with
respect to the time they stopped working each night. See, e.g., Tr. 90–91 (Rodriguez); 309–10
(Marco); Tip Receipts (showing widely varying times, e.g., Rodriguez receipts range from
10:25:17 p.m. to 12:38:36 a.m.); Def. Br. 6.
The Court generally credits plaintiffs’ testimony regarding their work schedules over
defendants’ general testimony, Tr. 348–56 (Leo), and defendants’ propounded documentary
evidence, which the Court has discredited.
Based on the testimony viewed in totality, and the inferences that can be drawn from the
timestamps on the Tip Receipts, the Court finds that the delivery workers worked the following
schedules:
•
Rodriguez: 11 a.m. to 11:45 p.m. Sundays, Tuesdays, Wednesdays, and Thursdays; and
11 a.m. to 12:15 a.m. Fridays and Saturdays.
•
Hernandez: May 2013–March 2014: 11 a.m. to 11:45 p.m. Sundays, Mondays,
Wednesdays, and Thursdays; 11 a.m. to 12:15 a.m. Fridays and Saturdays; April 2014–
June 23, 2014: 11 a.m. to 11:45 p.m. Sundays through Thursdays, and 11 a.m. to 12:15
a.m. on Fridays.
26
•
Gonzalez: 5 p.m. to 11:45 p.m. Sundays through Thursdays; 5 p.m. to 12:15 a.m. on
Fridays and Saturdays. 14
•
Marco: 11 a.m. to 11:45 p.m. on Mondays, Tuesdays, Wednesdays and Thursdays; 11
a.m. to 12:15 a.m. on Fridays and Saturdays.
The delivery workers testified that they worked slightly different schedules than those
found by the Court above. Specifically, they testified as follows:
•
Rodriguez: 11 a.m. to 11 p.m. Sunday, Tuesdays, Wednesdays, and Thursdays; and 11
a.m. to 12 a.m. or 12:15 a.m. Fridays and Saturdays. Rodriguez Decl. ¶ 10; Tr. 90–91
(testifying he often worked later).
•
Hernandez:
o May 2013–March 2014: 11 a.m. to 11:45 p.m. Sundays, Mondays, Wednesdays,
and Thursdays; 11 a.m. to 12:30 a.m. or 12:45 a.m. Fridays and Saturdays; April
2014–June 23, 2014: 11 a.m. to 11:30 p.m. Sundays through Thursdays, and 11
a.m. to 12 a.m. on Fridays. Hernandez Decl. ¶¶ 13–14; Tr. 169–72.
•
Gonzalez: 5 p.m. to 11:45 p.m. Sundays through Thursdays; 5 p.m. to 1 a.m. on Fridays
and Saturdays. Gonzalez Decl. ¶ 10; Tr. 18.
•
Marco: 11 a.m. to 11:30 p.m. on Mondays, Tuesdays, Wednesdays and Thursdays; 11
a.m. to 12 a.m. on Fridays and Saturdays. Marco Decl. ¶ 16; Tr. 307–10.
Hernandez, Rodriguez, and Marco further declared that they would work 15–30 minutes
beyond their usual schedules. Hernandez Decl. ¶ 15; Rodriguez Decl. ¶ 11; Marco Decl. ¶ 17.
14
Although the Court makes these findings as to the times Gonzalez started and ended work each
day, the Court does not credit his testimony that he worked seven days per week. Tr. 25, 43–44.
This testimony, while not impossible, is less plausible in light of Gonzalez’s testimony that he
also worked another part-time job, Tr. 17, 43, is contrary to defendants’ contrary testimony that
he worked five days per week, Tr. 352–53 (Leo), and appears to conflict with the amount of
money he was actually paid on a weekly basis, as opposed to the amount he declared he was
paid, see supra section IV.B.1. Therefore, the Court finds that for each week reflected in the Pay
Journal, the number of days Gonzalez worked equals his total weekly salary divided by 25. For
dates not recorded in the Pay Journal, the Court finds that he worked six days per week. The
Court makes this finding based on the mode number of days the Court finds he worked based on
the data recorded in the Pay Journal ($150 divided by $25 per day), and because it is the same
number of days per week all of the other delivery workers worked. See also, e.g., Tip Receipts
for 9/22/13–9/28/13 (showing six days worked).
27
The Court’s estimates are necessarily in the form of approximations, but they reflect just
and reasonable inferences from the available evidence. The schedules found above reflect, for
certain plaintiffs, a later ending time, and in some cases, an earlier ending time, than plaintiffs
themselves recalled. This does not reflect differing credibility determinations as between
plaintiffs. Rather, the Court finds that there is no basis to find that certain delivery workers
generally worked later than others. Rather, the Court believes that the variations among these
workers’ testimony reflect differing good-faith approximations and recollections of their similar
experiences. Accordingly, the Court finds that the delivery workers generally left around the
same time as one another each day.
The Court’s finding of 11:45 p.m. as the end time for Sundays through Thursdays, and
12:15 a.m. for Fridays and Saturdays reflects an inference from multiple pieces of evidence. The
Court credits defendants’ testimony that the restaurant officially closed for business at 11 p.m.
Sundays through Thursdays and 11:30 p.m. on Fridays and Saturdays. However, the Court finds
that the delivery workers often worked beyond those times, either completing deliveries, taking
out the garbage, or performing cleaning duties in the kitchen and in the basement. The Court
finds, however, that the delivery workers did not clean the kitchen for one hour after completing
their delivery shifts every day, but rather, multiple times per week, spent approximately 30–60
minutes cleaning the kitchen. See, e.g., Tr. 306–12 (Marco testifying that it took approximately
45 minutes to clean the kitchen, and that the kitchen was cleaned every night, though sometimes
the cleaning would be started by a subset of delivery workers while others were still completing
deliveries).
The timestamps on the Tip Receipts submitted by defendants also shed light on plaintiffs’
hours. Plaintiffs consistently testified that they received their tip receipts near the end of their
28
time working: Sometimes they received their tips and immediately left the restaurant, and
sometimes they received their tips and returned to clean the kitchen. See, e.g., Tr. 310–11
(Marco); see also Tr. 244 (Rodrigues testifying that the timestamps were generated, and delivery
workers were paid tips, at the end of the shifts). Although the Tip Receipts received in evidence
are not comprehensive for each delivery worker, based on the large number of receipts submitted
(369 legible receipts), and defendants’ incentive to submit any and all receipts in their
possession, the Court finds that the timestamps on the tip receipts in evidence fairly represent the
times plaintiffs received their tips each day.
The tip receipts for the delivery workers show the following average times 15:
•
Marco: 11:40:26 p.m. Friday & Saturday; 11:25:07 p.m. Sunday–Thursday.
•
Rodriguez: 12:02:31 a.m. Friday & Saturday; 11:24:12 p.m. Sunday–Thursday.
•
Hernandez: 11:57:02 p.m. Friday & Saturday; 11:23:39 p.m. Sunday–Thursday.
•
Gonzalez: 11:57:34 p.m. Friday & Saturday; 11:06:39 p.m. Sunday–Thursday.
The consistency of the averages reflected on the Tip Receipts for three out of four of the
delivery workers for each category (Friday/Saturday and Sunday–Thursday) suggests that those
times were the most typical as to when a delivery worker received his tips. In arriving at the
conclusions above, the Court considered plaintiffs’ approximations in their declarations, and
15
To calculate these averages, the Court’s staff entered the dates and times for all Tip Receipts
submitted in Ex. C into a spreadsheet using Microsoft Excel, and used the “average” function to
perform an average for (1) the dates that fell on a Friday or Saturday, and (2) the dates that fell
on Sundays–Thursdays. For dates which had multiple receipts, the average was calculated using
only the later time. One entry was excluded as an obvious aberration that could unduly impact
the average (Marco, 9/19/13, 3:15 p.m.). To ensure that the average function calculated the
correct average time, the times entered into the spreadsheet were inverted as to whether they
were a.m. or p.m. For example, if the tip receipts showed 11 p.m., 11:30 p.m. and 12 a.m., they
were input into the spreadsheet as 11 a.m., 11:30 a.m. and 12 p.m. respectively, so as to properly
produce an average of 11:30, and not 3:30. Seven tip receipts were not used because either the
date, time, or both were illegible.
29
their testimony that they often returned to work to clean the kitchen after receiving their tips, and
therefore found general end-of-work times that are approximately 15–20 minutes after the
average timestamp on the tip receipts.
The Tip Receipts also served as the basis for the Court’s rejection of Hernandez’s
testimony that he worked materially later during his first stint as a delivery worker (May 2013–
March 2014) than when he returned to Spice Symphony in April 2014–June 2014. See
Hernandez Tip Receipts (average Friday/Saturday of 11:57:20 p.m. and 11:55:29 p.m.
respectively; average Sunday–Thursday of 11:24:27 p.m. and 11:20:03 p.m. respectively).
2.
Romero
Romero worked a regular weekly schedule, on Mondays, Wednesdays, Thursdays,
Fridays, Saturdays, and Sundays. Romero Decl. ¶ 10. The Court credits Romero’s declaration
and live testimony to the effect that he began work each day at 10 a.m., id.; Tr. 107, when, he
explained, he opened the restaurant. The Court finds it reasonable to infer that the restaurant
opened for employees at least one hour before it opened to the public at 11 a.m. each day. See
Tr. 107.
However, the Court finds that the times Romero typically finished work were earlier than
he stated in his declaration, based on aspects of his live testimony. Romero’s declaration states
that he finished work at 12 a.m. on Mondays, Wednesdays, and Thursdays; 1 a.m. on Fridays and
Saturdays; and 11 p.m. on Sundays. But he testified that he closed the restaurant on no more
than four occasions; that approximately one time per month he helped the delivery workers clean
the kitchen, staying as late as 1 a.m., and that otherwise he left before the delivery workers and
Rosales. Tr. 107–09. He testified that he normally left at 11 p.m. Tr. 108.
The Court therefore finds that the evidence supports a just and reasonable inference that
Rosales regularly finished work at 11 p.m. on Sundays, Mondays, Wednesdays, and Thursdays,
30
and that, given his responsibilities overseeing the delivery workers, he finished work at 12 a.m.
on Fridays and Saturdays.
3.
Rosales
Rosales worked a regular weekly schedule, on Sundays, Tuesdays, Wednesdays,
Thursdays, Fridays, and Saturdays. Rosales Decl. ¶ 10. The Court credits his declaration and
testimony that he generally worked from 11 a.m. until 11 p.m. Sundays, Tuesdays, Wednesdays
and Thursdays, and from 11 a.m. until 12 a.m. Fridays and Saturdays. Rosales Decl. ¶ 10; Tr.
137–38.
B.
Breaks
As discussed supra section II, the Court does not credit defendants’ documentary
evidence with regard to plaintiffs’ hours worked, including insofar as these documents purport to
reflect breaks from work during the workday. See Tr. 258–59 (Rodrigues describing that Leo or
Chaouhan recorded the times plaintiffs started and stopped work each day, as well as the time
plaintiffs would go on break and stop break). The Court finds, however, that plaintiffs (with the
exception of Gonzalez) were afforded a midday break—albeit of shorter duration than that
claimed by defendants—but not a dinner break.
Defendants testified that all plaintiffs except Gonzalez had a two-hour, midday break
between 3 p.m. and 5 p.m. Rodrigues Aff. ¶ 9; Leo Decl. ¶ 9; Chaouhan Aff. ¶ 9; Tr. 258–59
(Rodrigues); see also Ndiaye Aff. ¶ 2; Tr. 341–42 (Ndiaye). Although some plaintiffs denied
having any breaks whatsoever, Hernandez Decl. ¶ 16; Romero Decl. ¶ 11; see also Gonzalez
Decl. ¶ 11, others acknowledged that they were supposed to receive regular breaks but in reality
these did not occur as promised because of interruptions from work, see Rodriguez Decl. ¶ 12
(was supposed to get meal breaks, but did not because of interruptions); Marco Decl. ¶ 18
(received 15-minute breaks, although he was supposed to receive one hour); Rosales Decl. ¶ 11
31
(received 30-minute breaks, but would be interrupted by work two times per week); Tr. 102–03
(Rodriguez acknowledging that lunches would be provided by restaurant, but that lunch
commonly interrupted by the need to make deliveries); 140–41 (Rosales acknowledging a
general two-hour recess, although noting that he typically used only approximately 40–50
minutes of the break, working the rest to prepare food, cut vegetables, and bring things up from
the basement).
The Court therefore finds that between the hours of 3 p.m. and 5 p.m. each day, plaintiffs
had break time which they in theory could use for their own purposes, but that some of that time
tended to be interrupted by work tasks. The Court finds that the evidence supports a just and
reasonable inference that the delivery workers (except for Gonzalez 16), and Romero, whose work
was related to that of the delivery workers, generally had 60 minutes of break time between 3
p.m. and 5 p.m., and that Rosales generally had 45 minutes of break time, which plaintiffs were
free to use for their own purposes.
The Court finds that plaintiffs did not have a dinner break that regularly exceeded 20
minutes. Rodrigues testified that in addition to the midday break, plaintiffs also had a dinner
break that lasted 30–40 minutes. Tr. 286–87. Although the Court credits Rodrigues’s testimony
that plaintiffs took time to eat dinner during their shift when they were hungry, the Court does
not credit that these breaks lasted as long as 30-40 minutes. Rather, the Court finds, plaintiffs
were allowed to, and did, take short breaks to eat dinner when their work so permitted, but that
such breaks were informal, did not typically last more than 20 minutes, and that during the
breaks plaintiffs needed to be prepared to work if the need arose. See Tr. 103 (Rodriguez
testifying that plaintiffs did not partake in a dinner meal at the restaurant), 287 (Rodrigues not
16
Gonzalez did not receive this break because his shift began at 5 p.m.
32
attesting to dinner meal, despite attesting to a midday meal, belied that these meals were 30–40
minutes long and occurred on a regular basis).
VII.
Meals
The Court finds that the restaurant made food available for plaintiffs to eat for lunch and
dinner while working there. Tr. 102–03 (Rodriguez acknowledging that food was available for
lunch and dinner), 123 (Romero same), 161 (Rosales acknowledging that lunch was provided
every day, and sometimes dinner); Rodrigues Aff. ¶ 11 (attesting that plaintiffs ate the
restaurant’s family meals, but that defendants did not take a meal credit against plaintiffs’
wages); Leo Decl. ¶ 10 (same); Chaouhan Aff. ¶ 11 (same); Ndiaye Aff. ¶ 11 (delivery workers
regularly ate family meals). However, the Court finds, plaintiffs did not always avail themselves
of the food the restaurant made available; plaintiffs sometimes did not participate in the lunch
meal, and more frequently did not participate in the dinner meal, including because of the need to
work at that time. See Tr. 102–03 (Rodriguez stating that lunch would occasionally be
interrupted by the need to make deliveries, and saying that they generally did not have the dinner
meal), 161 (Rosales stating that workers were sometimes provided dinner). During the meals,
plaintiffs were allowed to eat chicken tikka marsala but not goat, lamb, fish, or shrimp. Tr. 123
(Romero). No evidence was submitted as to the costs incurred by defendants in providing these
meals; the dates plaintiffs ate, or did not eat, the meals; or the full range of food items made
available to plaintiffs for consumption.
VIII. Tools of the Trade
The Court finds that the delivery workers were required by defendants to use or purchase
bicycles, and related equipment, to make their deliveries.
The delivery workers utilized bicycles in order to make their deliveries. Tr. 363–64 (Leo
testified that all delivery workers used bicycles). Spice Symphony’s delivery territory covered
33
approximately one mile north and south of the restaurant, and half a mile east and west of the
restaurant. Id. (testifying the area covered 14th street to 57th street, and from the FDR Drive to
Sixth Avenue); see also Tr. 91 (Rodriguez same, except that it also extended to Seventh
Avenue).
Plaintiffs declared that they were “required to purchase” bicycles and various supporting
equipment (such as lights, helmets, vests, brakes, and tire replacements, as well as a whistle and
a raincoat) for their work. Gonzalez Decl. ¶ 24; Rodriguez Decl. ¶ 27; Hernandez Decl. ¶ 29;
Marco Decl. ¶ 33; see also Tr. 363–64 (Leo testifying that delivery workers had their own
bicycles which they used to perform their duties). Although no plaintiff testified that he was told
directly by any of the defendants that they were required to use a bicycle, Rodriguez testified that
he was told that he needed to use a bicycle by Romero, who supervised the delivery workers. Tr.
92–94. Romero confirmed that he informed the delivery workers that they needed to use
bicycles, and further explained that he gave this instruction at Chaouhan’s behest. Tr. 124–25
(Romero). He also explained, as context, that the need for bicycles was evident by Chaouhan’s
frequently calling delivery workers on their cell phones to find out their locations and status with
respect to deliveries. See id.
Defendants deny that the delivery workers were required to use bicycles. Leo testified
that he never indicated in interviews that would-be delivery workers were required to purchase or
have bicycles, but rather, that it was up to the delivery workers whether to ride bicycles or,
perhaps, walk to make their deliveries. Tr. 363; see also Rodrigues Aff. ¶ 19 (attesting that
delivery workers were not required to purchase tools of the trade); Leo Decl. ¶ 18 (same);
Chaouhan Aff. ¶ 19 (same); Ndiaye Aff. ¶ 10 (same). However, Leo acknowledged, in response
to the Court’s questioning, that using a bicycle was realistically necessary to perform delivery
34
duties with efficiency given the size of the restaurant’s delivery territory. Tr. 364. He also
acknowledged that, although he never asked any of the delivery workers in their hiring
interviews whether they possessed a bicycle, he already knew that they possessed bicycles
because they arrived at the restaurant with their bicycles, and that he had never hired a delivery
worker who did not use a bicycle. Tr. 363–64.
The Court finds that the plaintiff delivery workers were required to use bicycles to
perform their delivery duties, and that they used and/or purchased their own bicycles and related
equipment to perform these duties. The Court credits Romero’s testimony that he conveyed the
requirement of using bicycles to the delivery workers as a result of instructions he received from
Chaouhan. The size of the delivery territory, and the need for the delivery workers to make
prompt deliveries (as evidenced by Chaouhan’s frequent calls to delivery workers regarding their
delivery status), made using bicycles an essential component of the delivery workers’ duties.
While it was certainly also in the delivery workers’ interests that the deliveries be made as
quickly as possible—because more deliveries resulted in more tips for the delivery workers—the
Court does not credit defendants’ testimony that the delivery workers could have maintained
their employment by making only as many deliveries as could be made by foot.
Although no documentary evidence was introduced, the Court credits plaintiffs’
declarations regarding the expenses they incurred in the purchase and maintenance of their
bicycles and related equipment. Specifically, plaintiffs attested to the following expenses:
•
Gonzalez: one bicycle for $600; two helmets for $45 each ($90); three vests for $25
each ($75); four lights for $15 each ($60); eight wheel replacements for $15 each
($120); two brakes for $15 each ($30). Gonzalez Decl. ¶ 24.
35
•
Hernandez: two bicycles for $300 and $200 respectively; one helmet for $35.
Hernandez Decl. ¶ 29.
•
Rodriguez: one bicycle for $250; one helmet for $35; two vests for $15 each ($30);
two brakes for $35 each ($70); two lights for $30 each ($60); one whistle for $25; one
raincoat for $60. Rodriguez Decl. ¶ 27.
•
Marco: one bicycle (for an amount not specified); one vest for $20; one helmet for
$40; and bicycle lights for $80. Macro Decl. ¶ 33.
IX.
Defendants’ Willfulness and Good Faith
Here, the Court makes findings of fact with respect to defendants’ willfulness with
respect to their violations of the FLSA, and good faith compliance with the FLSA and NYLL.
The Court does not find that defendants knew that they were violating the FLSA, or that
they consciously disregarded the risk that they were doing so. Plaintiffs provided no evidence
bearing on defendants’ state of mind with respect to the legality of the restaurant’s pay practices.
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. And the Court is quite troubled by defendants’ trial conduct—specifically, their submission
of a Pay Journal doctored to falsely indicate that plaintiffs had worked fewer hours than they
actually did, and that plaintiffs had agreed to sub-minimum-wage hourly rates ($6 for regular
hours; $9 for overtime) on account of a tip credit.
Nevertheless, the assembled evidence is more consistent with the conclusion that, during
the period at issue, defendants were ignorant and incurious as opposed to willfully non-compliant
with federal law. Further, the fact that the delivery workers generally received substantial sums
in tips, and that the non-delivery workers (who did not receive tips) received substantially higher
36
salaries than the delivery workers, suggests that defendants may have, mistakenly, believed that
it was sufficient under the law that the total sums plaintiffs received (including via tips) exceeded
the minimum wage. Plaintiffs, notably, did not adduce any evidence that any of the defendants
had had prior experiences that would have sensitized them to the obligations of the FLSA. Such
evidence might have supported an inference that defendants’ violations of the same laws here
were willful. In the absence of evidence from which more reliable inferences could be drawn as
to defendants’ disobedient state of mind, the Court finds that the trial evidence does not support
that defendants acted willfully.
At the same time, the Court cannot find good faith compliance by defendants. The trial
record was devoid of evidence that defendants undertook any effort to ascertain their obligations
under the FLSA and the NYLL. In opening statements, defense counsel suggested that there
would be testimony about conversations with an accountant. Tr. 14. But the defense did not
offer such testimony (or other evidence).
X.
Credibility
In addition to the Court’s close review of the documentary evidence, the Court paid close
attention to the credibility of the trial witnesses. The Court’s judgment is that plaintiffs were, in
general, significantly more credible than defendants in their testimony.
Credibility determinations can be of great importance in cases where, as here, there are
conflicting accounts as to workplace practices and the authenticity of documents. In this case,
credibility determinations were complicated by language barriers. All plaintiffs testified in
Spanish and their testimony was conveyed to the Court by a translator. Thus, the Court, as
factfinder, lacked direct access to some of the linguistic cues or nuances of expression that can
bear on a witness’s veracity. In some instances, answers to questions on cross-examination
37
questions were non-responsive, in a way that strongly suggested to the Court that the thrust of a
question had been, quite literally, lost in translation.
Despite these limitations, some important observations relating to credibility could be
made, and the Court was generally able to assess the credibility of the witnesses’ claims in their
sworn declarations based on the extent to which that testimony withstood cross examination and
accorded with other credible evidence.
As to plaintiffs, the most significant area of conflicting testimony concerned the delivery
worker plaintiffs’ weekly pay. Through the Pay Journal, defense counsel was able to impeach
the testimony of the delivery worker plaintiffs to the effect that they had been paid, during either
their entire employment or long stretches of it, a fixed and never varying weekly salary. As the
Pay Journal revealed, and as Rodriguez, Gonzalez, and Marco acknowledged was accurate, the
delivery workers’ pay did fluctuate to some degree between different weeks. The Court does not
find, however, that this inaccuracy seriously impaired Rodriguez’s, Gonzalez’s, Hernandez’s, or
Marco’s general credibility. Although their weekly pay did vary to a modest degree, the delivery
workers frequently received the weekly pay to which they attested. The Court therefore finds
their generalization about their weekly pay to have been just that—a generalization that was
broadly accurate, but which lacked precision, perhaps because of language barriers and perhaps
because the workers had forgotten that in discrete weeks their pay total had deviated from the
norm. Notably, too, defendants did not produce the Pay Journal until the brink of trial, after
plaintiffs had submitted their written declarations. Had the opportunity been presented for
plaintiffs to refresh their memory by reviewing the weekly pay totals alongside which they
signed in the Pay Journal, plaintiffs’ recollections in their declarations as to their weekly pay
amounts may have been more nuanced.
38
Similarly, the Court does not find that Romero’s testimony that he received a fixed
weekly rate of $425—whereas his actual weekly pay was either $400 or $450—damages his
credibility. This claim, too, appears to reflect imperfect recollection. It was also substantially
accurate, as $425 was the average of the two alternative rates Romero was paid.
Hernandez’s live testimony was more problematic. He was confronted with the Pay
Journal after other plaintiffs had testified, and had, in fact, acknowledged their signatures in it
and that their pay had varied to some degree as opposed to being uniform. Unlike his fellow
plaintiffs, Hernandez was evasive and unresponsive to clear questions. Even accounting for the
challenges presented by the language barrier and the unfamiliarity of a courtroom setting, the
Court is constrained to find his testimony, on the whole, less credible than that of the other
plaintiffs.
As to defendants, their testimony was generally incredible as to their claim that plaintiffs
had been paid according to pre-set hourly rates of pay. The Court was dismayed by defendants’
flailing and unpersuasive attempts to defend the pay-rate and hours-worked data recorded in the
Time Sheets and Pay Register—data which the Court has found to have been transparently
fabricated and added after-the-fact, to create a prop for use in defending against this lawsuit.
Memorably, Rodrigues and Chaouhan were unable even to explain the meaning of the data in the
Time Sheets they maintained. This not only undermined those Time Sheets, but more broadly
impeached defendants’ testimony that they had maintained records of plaintiffs’ actual hours
worked. Defendants’ willingness to stand by doctored records that ludicrously reported that the
delivery workers had each worked identical hours, week after week, down to the precise fraction
of an hour, despite holding jobs with flexible daily schedules, unavoidably called into question
the seriousness with which defendants had approached trial testimony.
39
Defendants’ willingness to create false documentary evidence was also revealed in the
copies of checks paid to Rosales. The memo endorsements on the checks identified him as a
part-time employee despite the acknowledged fact that he was not. Rodrigues was unable to
explain that repeated “mistake.” The logical inference was that one or more defendants had
included that language to buttress the false claim (contained elsewhere in the memo field) that
Rosales, and not Spice Symphony, was solely responsible for paying taxes attributable to his
work.
In light of defendants’ submission of this fabricated evidence, and their under-oath
embrace of it as accurate, the Court is constrained to view with suspicion the balance of
defendants’ testimony. The Court forcefully rejects as false defendants’ testimony as to
plaintiffs’ hours worked and purported pay rate, points on which the Court found plaintiffs’
testimony far more credible. In so finding, the Court notes, too, that defendants had an obvious
incentive to falsify as to these subjects—to avoid liability and a potentially heavy damages
award. 17
CONCLUSIONS OF LAW
XI.
Jurisdiction
This Court has subject matter jurisdiction under 28 U.S.C. § 1331 and the FLSA, 29
U.S.C. § 216, and supplemental jurisdiction over plaintiffs’ state law claims under 28 U.S.C.
§ 1367(a).
17
Plaintiffs too were interested parties, of course, and the Court was mindful of that in assessing
their testimony. However, plaintiffs’ testimony (save Hernandez’s) did not suffer from any of
the shortcomings dogging defendants. Plaintiffs’ testimony was logical, did not entail adopting
doctored records, and was broadly consistent with other evidence (including fellow plaintiffs’
testimony). In contrast to defendants’ lockstep adoption of the bogus pay records, the modest
variations in plaintiffs’ testimony were, if anything, a hallmark of credibility, insofar as they
suggested that plaintiffs had not coordinated a false story among themselves. The Court’s view
is that plaintiffs were genuinely attempting to recall and explain their hours and work conditions.
40
XII.
Enterprise Engaged in Interstate Commerce
The FLSA’s minimum wage and overtime provisions apply if an employee either “is
engaged in commerce or in the production of goods for commerce,” or “is employed in an
enterprise engaged in commerce or in the production of goods for commerce.” 29 U.S.C. §
206(a), 207(a)(1). “The two categories are commonly referred to as ‘individual’ and ‘enterprise’
coverage, respectively.” Jacobs v. N.Y. Foundling Hosp., 577 F.3d 93, 96 (2d Cir. 2009) (per
curiam). An “enterprise engaged in commerce” is an enterprise that (1) “has employees
handling, selling, or otherwise working on goods or materials that have moved in or produced for
commerce” and (2) “whose annual gross volume of sales made or business done is not less than
$500,000.” 29 U.S.C. § 203(s)(1).
The Court holds that Spice Symphony was an enterprise engaged in commerce for the
purposes of the FLSA for the years 2013 and 2014. During those years, the restaurant had
annual sales exceeding $500,000, and the employees of Spice Symphony regularly used
ingredients and other items that had traveled or were produced in interstate commerce. Joint
Stip. of Fact ¶¶ 5–6.
However, based on the trial evidence, the Court holds that plaintiffs have failed to show
that the FLSA covered them in the year 2012. There was no evidence adduced as to Spice
Symphony’s annual sales volumes in 2012, let alone that its annual sales exceeded $500,000, or
that any plaintiff qualified under the individual coverage provision during that year.
XIII. Employer Status
The Court holds that Spice Symphony, Chaouhan, Leo, and Rodrigues were all
employers subject to the FLSA’s and NYLL’s requirements during plaintiffs’ employment at
Spice Symphony.
41
The FLSA defines “employer” as “any person acting directly or indirectly in the interest
of an employer in relation to an employee.” 29 U.S.C. § 203(d). The Supreme Court has
emphasized that this is an expansive definition with “striking breadth.” Nationwide Mut. Ins. Co.
v. Darden, 503 U.S. 318, 326 (1992). An individual may simultaneously have multiple
“employers” for the purposes of the FLSA. See 29 C.F.R. § 791.2(a) (if facts demonstrate that
the employee is jointly employed by more than one employer, then “all of the employee’s work
for all of the joint employers during the workweek is considered as one employment for purposes
of [FLSA]”). Each employer is jointly and severally liable for all back wages and liquidated
damages. Moon v. Kwon, 248 F. Supp. 2d 201, 236–38 (S.D.N.Y. 2002).
“[W]hether an employer-employee relationship exists for purposes of the FLSA should
be grounded in ‘economic reality rather than technical concepts.’” Barfield v. N.Y.C. Health &
Hosps. Corp., 537 F.3d 132, 141 (2d Cir. 2008) (quoting Goldberg v. Whitaker House Coop.,
Inc., 366 U.S. 28, 33 (1961)). The determination of whether defendants are plaintiffs’ joint
employers is to be based on “the circumstances of the whole activity.” Rutherford Food Corp. v.
McComb, 331 U.S. 722, 730 (1947); see also Barfield, 537 F.3d at 141–42 (employment is “to
be determined on a case-by-case basis by review of the totality of the circumstances”). “Above
and beyond the plain language, moreover, the remedial nature of the statute further warrants an
expansive interpretation of its provisions so that they will have ‘the widest possible impact in the
national economy.’” Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132, 139 (2d Cir. 1999) (quoting
Carter v. Dutchess Cmty. Coll., 735 F.2d 8, 12 (2d Cir. 1984)). “When it comes to ‘employer’
status under the FLSA, control is key.” Lopez v. Acme Am. Envtl. Co., No. 12 Civ. 511 (WHP),
2012 WL 6062501, at *3 (S.D.N.Y. Dec. 6, 2012); see also RSR, 172 F.3d at 135 (“[C]ontrol of
employees is central to deciding whether appellant should be deemed an employer.”).
42
The Second Circuit has instructed that the “economic reality” test compels courts to
consider a range of factors in resolving whether a defendant qualifies as an employer under the
FLSA, including “whether the individual: ‘(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.’” Gillian
v. Starjem Rest. Corp., No. 10 Civ. 6056 (JSR), 2011 WL 4639842, at *4 (S.D.N.Y. Oct. 4,
2011) (citing Carter, 735 F.2d at 12). “No one of the four factors standing alone is dispositive.
Instead the ‘economic reality’ test encompasses the totality of circumstances, no one of which is
exclusive.” RSR, 172 F.3d at 139 (internal citation omitted). 18
The statutory standard for employer status under the NYLL is nearly identical to that of
the FLSA. Compare 29 U.S.C. § 203(d) (“‘Employer’ includes any person acting directly or
indirectly in the interest of an employer in relation to an employee . . . .”), with N.Y. Lab. Law
§ 190(3) (“‘Employer’ includes any person, corporation, limited liability company, or association
employing any individual in any occupation, industry, trade, business or service.”). “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. 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.” Inclan v. N.Y. Hosp. Grp., Inc., 95 F.
Supp. 3d 490, 511 (S.D.N.Y. 2015) (citations and internal quotation marks omitted). The parties
do not argue otherwise, and the Court is aware of no authority to the contrary. The Court
18
In addition to the formal control test comprising the Carter factors, the Second Circuit has also
articulated a functional control test comprising other factors, which are less applicable here. See
Zheng v. Liberty Apparel Co., 355 F.3d 61, 71–72 (2d Cir. 2003); Barfield v. N.Y.C. Health &
Hosp. Corp., 432 F. Supp. 2d 390, 392–93 (S.D.N.Y. 2006), aff’d, 537 F.3d 132 (2d Cir. 2008).
43
therefore follows the weight of authority among district courts in this Circuit and applies the
economic reality analysis to both statutes. See Hart v. Rick’s Cabaret Int’l, Inc., 967 F. Supp. 2d
901, 940 (S.D.N.Y. 2013).
Here, the parties stipulated that all plaintiffs were employees of Spice Symphony. Joint
Stip. of Fact ¶ 2. The Court holds that Chaouhan, Leo, and Rodrigues also were plaintiffs’
employers. 19 All three were managers at Spice Symphony during the time plaintiffs were
employed there. And, as to the RSR factors, at least Leo and Chaouhan had the power to hire
employees; all three were involved in determining the rate and method of payment for plaintiffs;
Leo and Chaouhan supervised and controlled the employees’ work schedules and conditions of
employment; Rodrigues maintained the restaurant’s employment records during the relevant
period; and all three were involved in paying plaintiffs their wages—Leo and Chaouhan
generally paid the delivery workers their tips, and Rodrigues paid all employees their weekly
wages. Thus, the Court holds that the totality of the circumstances supports the conclusion that
all three individual defendants were plaintiffs’ joint employers along with the corporate entity
itself.
XIV. Minimum and Overtime Wages
Both the FLSA and NYLL provide that an employee must be paid a minimum wage. 29
U.S.C. § 206; N.Y. Lab. Law § 652. The minimum wage rate under the FLSA was $7.25 per
hour during plaintiffs’ employment at Spice Symphony. Dkt. 47 (“Joint Stip. of Law”) ¶ 1
(citing 29 U.S.C. § 206(a)). The minimum wage rate under the NYLL varied during the period
relevant here: From January 1, 2011 through December 30, 2013, the minimum wage rate was
19
Defendants’ brief did not address whether each of the individual defendants qualified as joint
employers.
44
$7.25 per hour; and from December 31, 2013 through December 30, 2014, it was $8.00 per hour.
Id. ¶ 2 (citing N.Y. Lab. Law § 652; 12 N.Y.C.R.R. § 146-1.2(a)).
Both the FLSA and NYLL also provide that for each hour an employee works in excess
of 40 hours in a given work week, the employee must be paid at the rate of one and one-half
times the employee’s regular hourly rate. Joint Stip. of Law ¶ 6 (citing 29 U.S.C. § 207; 12
N.Y.C.R.R. § 146-1.4). Under the FLSA, overtime pay is calculated using a multiplier of one
and one-half to an employee’s “regular rate” of pay. Joint Stip. of Law ¶ 7 (citing 29 U.S.C.
§ 207(a)(1); 29 C.F.R. § 778.107).
To determine whether defendants violated the FLSA’s and NYLL’s minimum wage and
overtime provisions, the Court must first address (1) whether defendants are entitled to take a tip
credit against their minimum wage and overtime obligations for tips received by the delivery
workers; (2) whether defendants are entitled to take a meal credit for food provided by the
restaurant to plaintiffs for meals; and (3) whether plaintiffs, during their workdays, took qualified
breaks that do not qualify as work time and therefore are not compensable time under the
statutes. Once these potential credits and deductions are resolved, the Court then applies the
pertinent minimum wage and overtime law to the facts.
A.
Tip Credit
1.
FLSA
Under the FLSA, “an employer [may] pay a tipped [employee] a cash wage that is lower
than the statutory minimum wage, provided that[, inter alia,] the cash wage and the employee’s
tips, taken together, are at least equivalent to the minimum wage.” Inclan, 95 F. Supp. 3d at 497
45
(citing 29 U.S.C. §§ 203(m)). 20 “This allowance is known as a ‘tip credit.’” Salinas v. Starjem
Rest. Corp., 123 F. Supp. 3d 442, 465 (S.D.N.Y. 2015).
The FLSA provides that the tip credit “shall not apply with respect to any tipped
employee unless [1] such employee has been informed by the employer of the [statute’s tip
credit] provisions, and [2] all tips received by such employee have been retained by the
employee.” 29 U.S.C. § 203(m). The “tip credit” provision is “strictly construed,” and “an
employer may not take a tip credit unless it complies strictly with both statutory requirements.”
Chan v. Sung Yue Tung Corp., No. 03 Civ. 6048 (GEL), 2007 WL 313483, at *17 (S.D.N.Y.
Feb. 1, 2007), abrogated on other grounds by Barenboim v. Starbucks Corp., 698 F.3d 104 (2d
Cir. 2012).
Courts in and outside of this District “have interpreted the notice provision to require ‘at
the very least notice to employees of the employer’s intention to treat tips as satisfying part of
the employer’s minimum wage obligations.’” Copantitla v. Fiskardo Estiatorio, Inc., 788 F.
Supp. 2d 253, 287 (S.D.N.Y. 2011) (quoting Martin v. Tango’s Rest., Inc., 969 F.2d 1319, 1322–
23 (1st Cir. 1992); citing also Kilgore v. Outback Steakhouse of Fla., Inc., 160 F.3d 294, 298
(6th Cir. 1998) (“[A]n employer must inform the employee that it intends to treat tips as
satisfying part of the employer’s minimum wage obligation.”); Reich v. Chez Robert, Inc., 28
F.3d 401, 404 (3d Cir. 1994) (“Section 3(m) . . . allows an employer to reduce a tipped
employee’s wage below the statutory minimum by an amount to be made up in tips, but only if
the employer informs the tipped employee that her wage is being decreased under section 3(m)’s
20
The FLSA defines a tipped employee as “any employee engaged in an occupation in which he
customarily and regularly receives more than $30 a month in tips.” 29 U.S.C. § 203(t).
Plaintiffs do not dispute that the delivery workers qualified as tipped employees.
46
tip-credit provision.”)). An employer gives sufficient notice if, for example, it “give[s]
employees a copy of § 203(m) and inform[s] them that their tips will be used as a credit against
the minimum wage as permitted by law.” Chan v. Triple 8 Palace, Inc., No. 03 Civ. 6048
(GEL), 2006 WL 851749, at *19 (S.D.N.Y. Mar. 30, 2006) (citing Kilgore, 160 F.3d at 298–
300), superseded by regulation on other grounds. “Employers do not have to ‘explain’ the tip
credit to employees, however; it is enough to ‘inform’ them of it.” Id. (quoting Kilgore, 160
F.3d at 298). The FLSA’s notice provision does not require that the notice be given in writing.
See 29 U.S.C. § 203(m); Copantitla, 788 F. Supp. 2d at 288 (evaluating substance of oral
statements made to employees).
The FLSA’s notice requirement “must be satisfied even if the employee received tips at
least equivalent to the minimum wage.” Chung v. New Silver Palace Rest., 246 F. Supp. 2d 220,
229 (S.D.N.Y. 2002). The employer bears the burden of demonstrating compliance with the
FLSA’s notice requirement. He v. Home on 8th Corp., No. 09 Civ. 5630 (GBD), 2014 WL
3974670, at *5 (S.D.N.Y. Aug. 13, 2014). “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.” Inclan, 95 F. Supp. 3d at 497 (quoting Chez
Robert, 28 F.3d at 403) (internal quotation marks omitted).
Defendants here satisfied the first requirement of the tip credit, as plaintiffs concede that
the delivery workers retained all of their tips. However, defendants have not complied with the
notice provision under the FLSA and therefore cannot avail themselves of a tip credit to satisfy
their minimum wage obligations to the delivery workers. 21 As the Court has explained, supra
21
Although defendants’ brief cites twice to testimony that Romero received $20–$30 in tips per
month, defendants nowhere contend that he was informed that his tips would be used to offset
47
section V, the delivery workers, upon their hiring, were informed that they would be paid a fixed
weekly wage 22 and tips, but Spice Symphony never informed the employees that it intended to
use the tips the workers received to satisfy any part of its minimum wage obligations. Moreover,
the Court found, Spice Symphony did not maintain, in English and Spanish, posters from the
Department of Labor containing information about the provisions of the FLSA. And, even had a
DOL poster been prominently displayed in the workplace, Spice Symphony’s notification to the
delivery workers merely that they would earn certain wages plus tips, without more, would not
satisfy the FLSA’s notice provision for taking a tip credit. See Copantitla, 788 F. Supp. at 287–
88 (holding employer had not satisfied notice provision under similar facts); see also Salinas,
123 F. Supp. 3d at 461, 465–67 (crediting, over employer’s contrary attestation, employees’
declarations that they were not told when hired that they would be paid at a below minimum
wage rate because they would be receiving tips, and therefore finding the notice provision
unsatisfied). 23
Simply put, Spice Symphony failed entirely to notify the workers that their statutory
minimum-wage entitlement would be met, in part, by the payment of tips. This case is thus
distinct from Garcia v. Koning Rests. Int’l, L.C., No. 12 Civ. 23629, 2013 WL 8150984 (S.D.
Fla. May 10, 2013), on which defendants rely. There, as the plaintiff worker himself
acknowledged, the employer had informed its delivery workers at an in-store meeting that it
defendants’ minimum and overtime wage obligations. Defendants therefore also cannot avail
themselves of a tip credit as to Romero.
22
For Gonzalez, a fixed daily wage.
Even if the Court had credited defendants’ testimony that the Pay Journal the delivery workers
signed when they collected their pay had indicated the wage rates that defendants claimed it was
paying the delivery workers of $6 per hour (and $9 per hour for overtime), these notations would
still have failed to provide the notice necessary to support a tip credit, because they did not
indicate that the tips were being used to satisfy Spice Symphony’s statutory wage obligations.
23
48
would pay them “a reduced cash wage of $5.00 an hour [compared to their previous, minimum
wage of $7.25 an hour] and that the rest of their minimum wage would be made up in tips”; the
employer thereby satisfied the notice requirement. Id. at *2, *5, *7. Unlike in Garcia, plaintiffs
here were never told that their wages would be reduced below the minimum wage on account of
tips received.
Defendants ask the Court to follow district courts from outside the District that have held
that a verbal notice to an employee that they would be paid a certain wage plus tips, combined
with a prominently displayed DOL poster in a language the employee can read, is sufficient
notice. See Def. Br. 25 (citing Pellon v. Bus. Representation Int’l, Inc., 528 F. Supp. 2d 1306,
1310–11 (S.D. Fla. 2007); Ide v. Neighborhood Rest. Partners, LLC, 32 F. Supp. 3d 1285, 1292–
93 (N.D. Ga. 2014)). Factually, however, those cases are inapposite, because the Court has not
credited defendants’ uncorroborated claim that the posters were prominently displayed during
plaintiffs’ employment. But even had the poster been displayed, the Court would decline to
permit a tip credit under the FLSA, for two reasons.
First, as several courts of appeals have held, the notice requirement for the FLSA tip
credit requires the employer to notify “employees of the employer’s intention to treat tips as
satisfying part of the employer’s minimum wage obligations,” or that the employee’s wages were
“being decreased” under the tip credit provision, and merely telling an employee that he will earn
certain wages plus tips does not supply such notice. See Copantitla, 788 F. Supp. at 287–88
(citing the standards articulated by the First, Third, and Sixth Circuits). As various courts in this
District have held, a DOL poster does not cure this deficiency where the employer has not made
its intentions plain to employees. Id. at 289 (“A generic government poster could inform
employees that minimum wage obligations exist, but could not possibly inform employees that
49
their employers intend to take the tip credit with respect to their salary.”) (declining to follow
Pellon); see also Salinas, 123 F. Supp. 3d at 467 (generic government poster not sufficient to
satisfy notice requirement, citing Copantitla); cf. Perez v. G & P Auto Wash Inc., 930 F. Supp.
2d 423, 435 (E.D.N.Y. 2013) (genuine issue of fact existed as to whether poster contained
information specific to employer’s tip credit practice in addition to relevant federal and state
labor laws, and therefore may have been sufficient to satisfy notice requirement).
Second, courts in this district have construed § 203(m)’s requirements more demandingly
than the out-of-district cases on which defendants rely. See, e.g., Chung, 246 F. Supp. 2d at 229;
Salinas, 123 F. Supp. 3d at 465; Copantitla, 788 F. Supp. 2d at 287, 289. This Court joins those
courts in strictly construing the FLSA’s exemptions. Indeed, Pellon, on which defendants relied,
acknowledged that “[e]xemptions are to be construed strictly against employers,” but stated that
it was unable to follow the district court cases so holding as to § 203(m), viewing them as
inconsistent with Eleventh Circuit precedent that applied “ordinary meaning analysis” to
construe a similar provision of the FLSA. 528 F. Supp. 2d at 1310; see also Ide, 32 F. Supp. 3d
at 1292–93 (relying on Pellon).
For these independent reasons, Spice Symphony may not utilize a tip credit so as to
reduce the minimum wage and overtime wages it was obliged to pay its delivery workers under
the FLSA.
2.
NYLL
The NYLL allows an employer to take a tip credit for tipped employees, subject to
certain conditions similar to those under the FLSA. “An employer may take a credit towards the
basic minimum hourly rate if a service employee or food service worker receives enough tips
and if the employee has been notified of the tip credit as required in section 146-2.2 of this Part.
Such employees shall be considered ‘tipped employees.’” 12 N.Y.C.R.R. § 146-1.3. Notice of
50
the tip credit under the NYLL, however, must be written: “Prior to the start of employment, an
employer shall give each employee written notice of the employee’s regular hourly pay rate,
overtime hourly pay rate, the amount of tip credit, if any, to be taken from the basic minimum
hourly rate, and the regular payday.” Id. § 146-2.2(a). These notices must be provided in
English and the workers’ primary language, and acknowledgement of receipt of such notices,
signed by the employee, are required to be kept for six years. Id. § 146-2.2 (a) & (c). An
employer that fails to comply with the notice requirements under the NYLL may not utilize the
tip credit to satisfy its minimum wage and overtime obligations. See Salinas, 132 F. Supp. 3d at
467; Inclan, 95 F. Supp. 3d at 498.
The written records maintained by defendants here fall far short of meeting these
obligations. Defendants do not contend that they ever provided the delivery workers with a
written notice of their “regular hourly pay rate, overtime hourly pay rate, [and] the amount of tip
credit, if any, to be taken from the basic minimum hourly rate” as required by § 146-2.2. See,
e.g., Hart v. Rick’s Cabaret Int’l, Inc., 60 F. Supp. 3d 447, 454–55 (S.D.N.Y. 2014) (defendant
could not utilize tip credit under NYLL due to failure to provide written wage notice). While the
delivery workers signed daily their tip receipts showing their tip income, and signed weekly the
Pay Journal showing their non-tip income, these documents nowhere recite the amount of tip
credit being taken to satisfy the minimum wage and overtime wage laws. Further, even if the
Court had credited defendants’ claim to have maintained DOL posters in the restaurant,
defendants’ notion that the delivery workers could have inferred that the restaurant was taking a
tip credit and calculated the amount of this credit for themselves is plainly at odds with the
NYLL’s notice requirement.
51
Therefore, Spice Symphony may not utilize a tip credit for the purposes of complying
with its obligations under the NYLL, either. 24
B.
Meal Credit
Defendants also propose to apply a credit against plaintiffs’ wages for meals defendants
provided plaintiffs at work. Def. Br. 24. The Court holds that defendants may not do so, under
either the FLSA or NYLL.
Under the FLSA, an employee’s wage “includes the reasonable cost . . . to the employer
of furnishing such employee with board . . . if such board . . . [is] customarily furnished by such
employer to his employees.” 29 U.S.C. § 203(m). However, the meal credit’s “reasonable cost”
may “not [be] more than the actual cost,” 29 C.F.R. § 531.3(a), and “the employer must retain
records documenting the out-of-pocket costs that it incurred,” Ke v. Saigon Grill, Inc., 595 F.
Supp. 2d 240, 256–57 (S.D.N.Y. 2008) (citing 29 C.F.R. § 516.27(a)). The employer “bears the
burden of proving both the actual costs and their reasonableness.” Id.; see also Nicholson v.
Twelfth St. Corp., No. 09 Civ. 1984 (HB), 2010 WL 1780957, at *3 (S.D.N.Y. May 4, 2010)
(“By law, an employer may claim a meal credit if it is properly documented.”). In addition,
under the FLSA, meal credits can only be used to offset an employer’s minimum wage, and not
overtime pay, obligations. Moon, 248 F. Supp. 2d at 232–33.
Defendants have not met their burden of proof as to this issue. Defendants have not
come forward with any evidence as to the costs incurred in providing plaintiffs with meals, or the
extent to which plaintiffs actually availed themselves of the meals offered by defendants. Nor
have they even claimed to have maintained the requisite records. Cf. Archie v. Grand Cent.
24
In light of this ruling, the Court has no occasion to address plaintiffs’ alternative argument that
plaintiffs’ performance of significant non-delivery work independently barred—in whole or in
part—Spice Symphony from taking a tip credit. See Pl. Br. 17–18.
52
P’ship, Inc., 86 F. Supp. 2d 262, 269 (S.D.N.Y. 2000) (determining costs by averaging the costs
for food and supplies paid for by defendants, and dividing it by the total number of meals served,
as evidenced by employee sign-in sheets for meals). 25 And plaintiffs’ testimony does not fill this
void. Plaintiffs testified that they often did not eat the food provided by defendants.
Nor may defendants utilize the meal credit to relieve themselves of NYLL obligations.
“Meals . . . provided by an employer to an employee may be considered part of the wages paid to
the employee but shall be valued at no more than . . . $2.50 per meal.” 12 N.Y.C.R.R. § 146-1.9.
To qualify as a meal, however, the employer “shall provide adequate portions of a variety of
wholesome, nutritious foods and shall include at least one of the types of food from all four of
the following groups: (1) fruits or vegetables; (2) grains or potatoes; (3) eggs, meat, fish, poultry,
dairy, or legumes; and (4) tea, coffee, milk or juice.” Id. § 146-3.7; see also Guan Ming Lin v.
Benihana Nat. Corp., 275 F.R.D. 165, 171 (S.D.N.Y. 2011) (finding employer must satisfy
§ 146-3.7’s requirements to utilize meal credit).
On the evidence presented at trial, defendants failed to satisfy these requirements.
Defendants have not supplied any proof that the food that they gave plaintiffs qualified as
“meals” by containing “adequate portions” of food from all four categories identified in the
regulations. And the definition of meal contains mandatory language, 12 N.Y.C.R.R. § 146-3.7
25
Defendants’ reliance on Archie for the proposition that “meals are ‘presumed to be part of
wages under the statute,’” Def. Br. 24 (quoting Archie, 86 F. Supp. 2d at 268), is misplaced to
the extent defendants suggest it excuses them from offering proof as to the costs of the meals
provided. The quoted language in Archie derived from the Second Circuit’s decision in Soler v.
G. & U., Inc., 833 F. 2d. 1104, 1109 (2d Cir. 1987), which noted that meals are presumptively
eligible to be considered as wages, unlike other “facilities” an employer provides, as to which a
case-by-case analysis is required to determine whether those facilities were intended to benefit
the employee or the employer. Neither Archie nor Soler supports excusing defendants from the
requirement to prove the fact that meals were provided or the cost of such meals.
53
(“shall provide” and “shall include”), indicating that failure to provide meals that meet the above
standards bars a defendant from taking meal credit against the wages owed to its employees. 26
C.
Meal Breaks
Under both the FLSA and NYLL, “all of the time worked during a continuous workday is
compensable, save for bona fide meal breaks.” Hart, 60 F. Supp. 3d at 475 n.15; see 29 C.F.R. §
785.19(a) (“Bona fide meal periods are not worktime.”). For a break to so qualify, the employee
“must be completely relieved from duty for the purposes of eating regular meals.” Id.
“Ordinarily 30 minutes or more is long enough for a bona fide meal period,” id., but “[r]est
periods of short duration, running from 5 minutes to about 20 minutes . . . are customarily paid
for as working time [and] must be counted as hours worked,” 29 C.F.R. § 785.18. “It is not
necessary that an employee be permitted to leave the premises if he is otherwise completely
freed from duties during the meal period.” 29 C.F.R. § 785.19(b). Similarly, the NYLL
provides that “[w]orking time means . . . time an employee is required to be available for work at
a place . . . prescribed by the employer such that the employee is unable to use the time
productively for his or her own purpose.” 12 N.Y.C.R.R. § 146-3.6.
26
A separate bar may apply: At least one court in this District has also held that an employer
may not utilize the meal credit unless it also complies with the NYLL’s recordkeeping
requirements. See Guan Ming Lin, 275 F.R.D. at 171 (“As a prerequisite to taking a meal credit,
the employer must state on the employee’s pay stub the amount of the meal credit.” (citing 12
N.Y.C.R.R. § 146–2.3)); see also Padilla v. Manlapaz, 643 F. Supp. 2d 302, 309–10 (E.D.N.Y.
2009) (employer not permitted to take tip or meal credit for failure to comply with recordkeeping
requirements under previous versions of regulations, since repealed). That said, the Court notes
that the meal credit regulation’s language does not expressly require such notice, by pay stub or
otherwise, as a condition of taking the credit. Compare 12 N.Y.C.R.R. § 146-1.9 (meal credit
“may be considered part of the wages”), with 12 N.Y.C.R.R. § 146-1.3 (tip credit may be taken
“if the employee has been notified of the tip credit as required in section 146-2.2 of this Part”
(emphasis added)). If such notice were required, that would independently bar use of the meal
credit here, because defendants did not provide plaintiffs with pay stubs at all, let alone ones that
“list . . . credits claimed (for tips, meals and lodging).” 12 N.Y.C.R.R. § 146-2.3.
54
The Court has found that Hernandez, Marco, Rodriguez, and Romero were generally
given a midday break of 60 minutes each day and that Rosales was generally given a 45-minute
break each day between 3 p.m. and 5 p.m. during which they were able to use the time for their
own purposes. Therefore, the Court holds defendants were not required to compensate them for
that time. See Pl. Br. 8 (conceding that if plaintiffs received a bona fide break, such time should
be excluded from plaintiffs’ working time).
D.
Minimum and Overtime Wage Violations
The Court holds that defendants violated the FLSA’s and NYLL’s minimum wage and
overtime provisions as to all plaintiffs. An employee seeking to recover underpayment of wages
“has the burden of proving that he performed work for which he was not properly compensated.”
Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946). However, where an employer
fails to maintain adequate records of the employee’s hours worked, wages earned, and other
terms and conditions of employment, the employee is found to satisfy this burden if he or she can
prove that the employee “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.” Id.; see also Moon, 248 F. Supp. 2d at 219 (citing Reich v. S. New
England Telecomms. Corp., 121 F.3d 58, 66 (2d Cir. 1997)). This burden is “not high” and may
be met “through estimates based on [the employee’s] own recollection.” Kuebel v. Black &
Decker Inc., 643 F.3d 352, 362 (2d Cir. 2011). “The burden then shifts to the employer to come
forward with evidence of the precise amount of work performed or with evidence to negative the
reasonableness of the inference to be drawn from the employee’s evidence.” Anderson, 328 U.S.
at 687–88. “If the employer fails to [do so], the court may then award damages to the employee,
even though the result be only approximate.” Id. at 688.
55
Here, the Court has found that defendants did not maintain accurate records of plaintiffs’
hours worked. And the Court holds that plaintiffs have met their burden, including by “just and
reasonable inference,” of proving their hours worked (but not properly compensated by
defendants), through their declarations and live testimony as to their recollections of their hours
worked. The Court’s findings regarding the general hours worked by plaintiffs incorporate the
Court’s overall assessment of all evidence bearing on this point, testimonial and documentary.
Defendants paid the plaintiff delivery workers a fixed weekly salary 27 that, based on the
hours the Court has found the plaintiff delivery workers worked, amounts to a sub-minimum
wage, for which defendants are not entitled to claim credit for tips earned by the delivery
workers or food provided to them by defendants. And, as to the non-delivery workers,
defendants paid Romero and Rosales fixed weekly salaries that did not compensate them for
their hours worked in excess of 40 hours per week at the overtime wage rate as required by the
statutes.
XV.
Spread of Hours
The NYLL entitles an employee to spread-of-hours pay, meaning “one additional hour of
pay at the basic minimum hourly rate” for “each day on which the spread of hours exceeds 10.”
12 N.Y.C.R.R. § 146-1.6(a). 28 The “spread of hours” refers to “the length of the interval
between the beginning and end of an employee’s workday[, and] . . . includes working time plus
time off for meals plus intervals off duty.” Id. § 146-1.6. “[A]ll employees in restaurants,
regardless of a given employee’s regular rate of pay,” are covered by the spread-of-hours
requirements.” Id. at § 146-1.6(d). In other words, employers must “pay [restaurant workers] an
27
For Gonzalez, a fixed daily salary.
Defendants’ brief recites the substantive requirements of the New York spread-of-hours
provisions, but incorrectly cites to 12 N.Y.C.R.R. § 142-2.4(a). Section 142 covers
“Miscellaneous Industries and Occupations”; § 146 covers workers in the hospitality industry.
28
56
extra hour’s pay at the regular minimum wage for each day they work more than ten hours.”
Shahriar v. Smith & Wollensky Rest. Grp., Inc., 659 F.3d 234, 241 (2d Cir. 2011) (citing the
previous version of the regulations).
The Court finds that defendants are liable for unpaid spread-of-hours pay as to all
plaintiffs except for Gonzalez. As the Court has found, all plaintiffs except for Gonzalez
regularly worked shifts whose spread of hours exceeded 10 hours each day. See supra section
VI.A.
Defendants concede some degree of liability for their failure to pay plaintiffs spread-ofhours wages, but propose to limit the days implicated, based on their time records. “[O]n days
where the Plaintiffs did not spend more than a total of 10 hours at the restaurant, including
breaks, they were not entitled to an additional spread of hours pay. As is evidenced by
Defendants’ time records, however, there were days where Plaintiffs’ daily shifts exceeded 10
hours, including breaks, and accordingly, an additional spread of hours pay was required on that
day.” Def. Br. 24–25. Defendants’ proposed damages calculations thus would award plaintiffs
spread-of-hours pay for only some weeks worked.
There are three problems with defendants’ attempt to use their time records to limit their
liability for failing to pay spread-of-hours wages. First, defendants’ time records do not cover
the full range of time that certain plaintiffs worked for defendants. Second, the Court has found
these time records unreliable. And third, even if they were reliable, the time records do not
actually identify the “spread-of-hours,” that is, the length of time between the beginning and end
of plaintiffs’ workdays, but rather only purport to show total number of hours worked. The time
records thus shed no light on the spread-of-hours claim.
57
Therefore, because the Court has found that all plaintiffs except Gonzalez regularly
worked a day that spanned more than 10 hours, the Court finds that defendants are liable for
spread-of-hours pay for each day that these plaintiffs worked, over the full time period that the
Court has found that each plaintiff worked. Of course, to the extent that the Pay Journal can be
used to identify weeks in which plaintiffs worked fewer than their normal number of days per
week, see Pl. Br. 9 n.3; supra note 14 (Gonzalez), defendants are not liable for spread-of-hours
pay with respect to days when a plaintiff did not work. See infra note 30.
XVI. Wage Notices and Statements
“Since April 9, 2011, the NYLL has required that, at the time of hiring, [and annually
through December 28, 2014,] employers provide their employees a written notice with the
following information: (1) the rate or rates of pay and basis thereof; (2) allowances, if any,
claimed as part of the minimum wage, including tip, meal, or lodging allowances; (3) the regular
pay day designated by the employer; (4) the employer’s name; (5) any ‘doing business as’ names
used by the employer; (6) the physical address of the employer’s main office or principal place
of business, and a mailing address if different; (7) the employer’s telephone number; and (8)
such other information as the commissioner deems material and necessary.” Salinas, 123 F.
Supp. 3d at 474 (citing N.Y. Lab. Law § 195(1)(a)) (footnotes omitted). For non-exempt
employees, the notice must state the employee’s regular hourly rate and overtime rate of pay.
N.Y. Lab. Law § 195(1)(a). The employer is required to obtain from its employees a signed and
dated written acknowledgment of receipt of such notice, in English and in the employee’s
primary language, each time the notice is given, and must maintain these receipts for six years.
Id. An employee who does not receive a wage notice within 10 business days of his first day of
employment is entitled to recover $50 for each week of work that the violations occurred, up to a
maximum of $2,500. N.Y. Lab. Law § 198(1-b) (eff. Apr. 9, 2011 to Feb. 27, 2015); Perez v.
58
Platinum Plaza 400 Cleaners, Inc., No. 12 Civ. 9353 (PAC), 2015 WL 1881080, at *4 (S.D.N.Y.
Apr. 24, 2015) (citing 2014 N.Y. Sess. Laws Ch. 537 (A.8106–C) (McKinney’s), amending N.Y.
Lab. Law. § 198(1–b) to allow for $50 per day with a cap of $5,000).
The Court finds that defendants violated the NYLL’s wage notice provision. As found
supra section V.C, defendants did not provide written notice to plaintiffs as to their rate of pay
and the allowances claimed by the employer. For reasons already stated, the Court does not
credit defendants’ testimony that the Pay Journal contained notations indicating plaintiffs’ rates
of pay, or that such notations, even if genuine, would have provided the legally required notice.
The Court finds that defendants violated the wage notice requirement for the entire duration of
each plaintiff’s employment at Spice Symphony.
“Since April 9, 2011, the NYLL has also required that employers ‘furnish each employee
with a statement with every payment of wages, listing the following’ information: (1) the dates
of work covered by that payment of wages; (2) the employee’s name; (3) the employer’s name,
address, and telephone number; (4) the rate or rates of pay and basis thereof; (5) gross wages; (6)
deductions; (7) allowances, if any, claimed as part of the minimum wage; and (8) net wages.”
Salinas, 123 F. Supp. 3d at 475 (citing N.Y. Lab. Law § 195(3)) (footnote omitted). For nonexempt employees, the statement must 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 § 195(3). “Prior to February [27], 2015, the failure to do so was
a violation for which plaintiffs could receive $100 per work week in damages, with a cap of
$2500.” Perez, 2015 WL 1881080, at *4 (citing 2014 N.Y. Sess. Laws Ch. 537 (A, 8106–C)
(McKinney’s), amending N.Y. Lab. Law § 198(1–d) to allow for $50 in damages per day with a
cap of $5,000).
59
The Court finds that defendants violated the NYLL’s wage statement provision, too. As
found supra section V.D, defendants did not provide wage statements to plaintiffs along with
their regular pay. The Court finds that defendants violated the wage statement requirement for
the entire duration of each plaintiff’s employment at Spice Symphony.
XVII. Tools of the Trade
The Court finds that defendants further violated the FLSA and NYLL insofar as the
plaintiff delivery workers were required to purchase and/or use bicycles and related equipment.
“An employer violates the FLSA if it requires an employee to purchase ‘tools of the trade which
will be used in or are specifically required for the performance of the employer’s particular
work’ and ‘the cost of such tools [purchased by the employee] cuts into the minimum or
overtime wages required to be paid to [the employee].” Salinas, 123 F. Supp. 3d at 476 (quoting
29 C.F.R. § 531.35). The same is true under New York law. Id. (citing 12 N.Y.C.R.R. § 146–
2.7(c) (“If an employee must spend money to carry out duties assigned by his or her employer,
those expenses must not bring the employee’s wage below the required minimum wage.”)).
Here, the Court has found that the plaintiff delivery workers were required by Spice
Symphony to use bicycles and related equipment. See supra section VIII. Other courts in this
District have found that bicycles qualify as tools of the trade under the FLSA for delivery
workers, such that delivery workers’ expenses related to the purchase and maintenance of
bicycles formed part of their damages under factual circumstances similar to those here. See Ke,
595 F. Supp. 2d at 257–58 (“The primary role of these [delivery workers] was to deliver hot
meals to hungry and often impatient customers over a large geographic expanse . . . . Absent
bicycles or motorbikes, it would have been impossible for the deliverymen to carry out their job
in a manner that satisfied the business needs of the restaurant.”); see also Cao v. Wu Liang Ye
Lexington Rest., Inc., No. 08 Civ. 3725 (DC), 2010 WL 4159391, at *4–5 (S.D.N.Y. Sept. 30,
60
2010) (“Plaintiffs have established that the plaintiff delivery workers were required to purchase
bicycles, which were used and specifically required for their delivery work. Because plaintiffs
were not reimbursed for the costs of the bicycles and the necessary repairs, and because they
were paid below minimum wage, they are entitled to recover damages for those amounts.”).
The evidence in this case—both direct evidence that Chaouhan instructed Romero to
convey the bicycle requirement to the delivery workers, and circumstantial evidence, based on
the size of the delivery territory and the need for prompt delivery—establishes that the delivery
workers were required to use bicycles to perform of their job duties, and thus distinguishes this
case from the one on which defendants rely. See Def. Br. 31 (citing Huo v. Go Sushi Go 9th
Ave., No. 13 Civ. 6573 (KBF), 2014 WL 1413532, at *3–4 (S.D.N.Y. Apr. 10, 2014) (plaintiff’s
conclusory allegations that he needed bicycle to deliver hot meals insufficient where he did not
supply more detail about frequency of use, distance required to be traveled, or problems
presented by absence of a bicycle)).
Defendants are therefore liable to plaintiff delivery workers for their costs in obtaining
and maintaining their bicycles, including the cost of the bicycles themselves and replacing tires
and brakes. See Ke, 595 F. Supp. 2d at 257–58; Cao, 2010 WL 4159391, at *4–5. The Court
also finds that defendants are liable for the costs related to the purchase and use of helmets,
vests, and bicycle lights. See N.Y. Vehicle and Traffic Law § 1236 (requiring that every bicycle
be equipped with two lights and a brake); N.Y.C. Admin. Code § 10.157 (e) & (i) (requiring that
businesses using bicycles for commercial purposes provide protective headgear to bicycle
operators, and that bicycle operators wear protective headgear and a reflective vest).
However, Rodriguez is not entitled to recover for the cost of the whistle or raincoat. A
whistle is not only not a required piece of equipment, but is prohibited for use on a bicycle. N.Y.
61
Vehicle and Traffic Law § 1236(b) (providing that a “bicycle shall not be equipped with nor
shall any person use upon a bicycle a siren or whistle”). Similarly, the raincoat was not a
required piece of equipment, and the Court holds that its use was primarily for Rodriguez’s own
benefit and not defendants’. See Ke, 595 F. Supp. 2d at 257–58 (holding that employees were
required to be compensated for bicycles and repair expenses based on their entitlement to credits
for “‘facilities’ that are ‘primarily for the benefit or convenience of the employer’” (citing 29
C.F.R. § 531.3(d)(1))).
XVIII. Damages
A.
Statutes of Limitations
The statute of limitations for FLSA actions is two years, or three years in cases of willful
violations. 29 U.S.C. § 255. “An employer willfully violates the FLSA when it ‘either knew or
showed reckless disregard for the matter of whether its conduct was prohibited by’ the [FLSA].”
Young v. Cooper Cameron Corp., 586 F.3d 201, 207 (2d Cir. 2009) (quoting McLaughlin v.
Richland Shoe Co., 486 U.S. 128, 133 (1988)). “The burden is on the employee to show
willfulness.” Id.
Plaintiffs here have not met their burden of showing willfulness. As explained, plaintiffs
adduced no evidence regarding defendants’ state of mind, so as to establish that defendants knew
their conduct was prohibited by the FLSA, or that they consciously disregarded the risk that it
was. An employer’s actions, even if unreasonable, cannot be held willful absent a showing of
recklessness. McLaughlin, 486 U.S. at 135 n.13. While the Court was distressed by defendants’
submission of fabricated evidence and incredible testimony, the relevant question is whether
defendants acted willfully at the time they violated the FLSA. Here, there is insufficient
evidence beyond the violations themselves to support such a finding. Therefore, the FLSA’s
two-year statute of limitations applies.
62
The statute of limitations period continues to run with respect to each potential plaintiff’s
collective action claim until that plaintiff files the written consent form. Lee v. ABC Carpet &
Home, 236 F.R.D. 193, 199 (S.D.N.Y. 2006) (citing 29 U.S.C. §§ 255, 256). Therefore, all of
plaintiffs’ FLSA claims that accrued before November 5, 2013, two years before plaintiffs filed
their consents to join this collective action, are barred by the statute of limitations.
The statute of limitations for actions brought under the NYLL is six years. Joint Stip. of
Law ¶ 4; N.Y. Lab. Law § 198(3). There is, therefore, no statute of limitations bar to any of
plaintiffs’ claims under New York law.
B.
Back Wages, Costs of Tools of the Trade, and Statutory Damages
For the reasons stated earlier, the Court holds that plaintiffs are entitled to compensatory
damages for defendants’ failure to pay them their wages required under the FLSA’s and NYLL’s
minimum wage and overtime provisions; unpaid spread-of-hours pay under the NYLL; and
statutory damages for defendants’ violations of the NYLL’s wage notice and wage statement
provisions.
Plaintiffs, however, may not receive a “double recovery” of back wages under both the
FLSA and NYLL. Gen. Tel. Co. of the Nw. v. EEOC, 446 U.S. 318, 333 (1980); Pl. Br. 19 n.8.
Plaintiffs’ damages award under the NYLL necessarily will subsume their award under the
FLSA, both because of the higher minimum wage that governed during certain periods and
because of the longer period covered by the NYLL. While the Court will formulate a separate
damages award for each claim, as a matter of economic reality, for each plaintiff, the NYLL
award will be decisive.
As to the mechanics of calculating back wages, the Court’s finding that plaintiffs were
not paid an hourly rate requires, under both the FLSA and NYLL, that the Court calculate their
regular rate of pay for the purposes of a damages calculation. Under the FLSA, “[t]he regular
63
rate is ‘the hourly rate actually paid the employee for the normal, non-overtime workweek for
which he is employed,’ and is calculated by ‘dividing the employee’s weekly compensation by
the number of hours for which that compensation is intended.’” Yang v. ACBL Corp., 427 F.
Supp. 2d 327, 338 (S.D.N.Y. 2005) (quoting Walling v. Youngerman–Reynolds Hardwood Co.,
325 U.S. 419, 424 (1945) and Moon, 248 F. Supp. 2d at 230; citing also 29 C.F.R. § 778.109)
(internal citations omitted). Under the NYLL, the Court divides the pay the plaintiff in question
actually received by the lesser of 40 hours or the actual number of hours he worked during the
work week. 12 N.Y.C.R.R. § 146-3.5.
For all of the delivery workers, whether their regular rates of pay are calculated using 40
hours per week or the actual number of hours the Court has found they generally worked (or the
rate of $6 per hour defendants claimed they paid the delivery workers), their regular rates of pay
fall below the minimum wage. Therefore, the delivery workers’ regular rate of pay for the
purposes of calculating the overtime pay they are due is the statutory minimum wage under both
the FLSA and NYLL. See 29 C.F.R. 778.107 (“The regular rate of pay at which the employee is
employed may in no event be less than the statutory minimum.”); Copantitla, 788 F. Supp. 2d at
291 (the regular rate of pay is the “regular rate at which [an employee] is lawfully employed,”
and thus is the higher of the FLSA’s minimum wage or the minimum wage applicable by virtue
of other legislation (quoting 29 C.F.R. § 778.5)); 12 N.Y.C.R.R. § 146–3.5(a) (“The term regular
rate shall mean the amount that the employee is regularly paid for each hour of work, before
subtracting a tip credit, if any.”); id. § 146-1.4 (calculating the regular rate of pay using at least
the minimum wage in the examples provided). 29
29
Under 12 N.Y.C.R.R. §§ 146-1.4 and 146-3.5, even the $9 overtime rate defendants
purportedly paid to the delivery workers would have been insufficient, as the regulation requires
a tipped employee’s overtime rate of pay to be calculated based on a regular rate of pay before
64
As to Romero and Rosales, to calculate their regular rate of pay, their regular weekly
salary should be divided by 40 hours. There is a rebuttable presumption that an employee’s
fixed weekly salary covers 40 hours worked. Giles v. City of New York, 41 F. Supp. 2d 308,
316–17 (S.D.N.Y. 1999). Defendants have not rebutted that presumption here with respect to
either Romero or Rosales. See supra section IV.B. Because each was paid a fixed weekly
salary, their regular rate of pay should be calculated by dividing those salaries by 40 hours.
Giles, 41 F. Supp. 2d at 317; 12 N.Y.C.R.R. § 146-3.5.
Although Rosales was paid weekly wages different from his regular salary for three
weeks in July 2014—receiving an extra one-sixth of his regular weekly pay, essentially an extra
day’s pay for working seven days for two of those weeks, and receiving $527 for one week for
which no explanation was offered—the Court finds that these aberrations do not undermine the
conclusion that he was paid a fixed weekly salary. For those weeks, Rosales’s regular rate of
pay should be calculated by dividing his regular rate of pay during that time period—$575—by
40 hours. 30 The Court also holds that the $400 “advance” that Rosales received on September
subtracting the tip credit. The same is true under the FLSA. See 29 C.F.R. § 531.60. Because
the Court has found that defendants were not entitled to utilize the tip credit, the regular rate of
pay used to calculate damages for the delivery workers must be the minimum wage under the
NYLL.
30
Plaintiffs conceded that, in certain weeks, they worked fewer hours than per their normal
schedules—an inference that follows from plaintiffs’ receipt on those weeks of wage amounts
that were much lower than normal. Pl. Br. 9 n.3. The Court has reviewed plaintiffs’ proposed
damages calculations and the inferences drawn as to the hours worked those weeks. The Court
finds plaintiffs’ approximations of the hours worked in those aberrant weeks reasonable, and
accepts them for use in the damages calculations to follow this Opinion, with these exceptions:
(1) Rodriguez: for 9/1-9/13/13, Rodriguez should be credited as having worked 35 hours each
week and having received $125 per week, per the Pay Journal; (2) Marco: for 7/15–7/21/13,
Marco should be credited with having worked 45 hours; (3) Rosales: for 7/7–7/20/13, Rosales
should be credited with having worked 80 hours per week; and (4) Gonzalez: Gonzalez’s hours
should be calculated based on the number of days he worked each week, as explained supra note
14; for the purposes of calculating his hours per week, in weeks in which Gonzalez worked five
65
30, 2014 should be credited against the back wages defendants owe Rosales as partial payment
for his work between September 22 and 30, 2014.
With regard to Marco, Rodriguez, Gonzalez, and Rosales, whose testimony established
the month, but not the specific date, they began working for Spice Symphony, the Court awards
damages beginning on the 15th day of the month they began their employment.
With regard to the delivery workers’ tools of the trade, the Court awards damages to
plaintiffs for the costs of purchasing and repairing their delivery bicycles, and purchasing related
required equipment, including a helmet, reflective vest, and bicycle lights. However, because
plaintiffs have not provided documentation to support their declarations as to the amount they
spent, or explanations for why they purchased more than one of certain items, so as to enable the
Court to evaluate the reasonableness of the amounts they attest that they spent, see Cao, 2010
WL 4159391, at *5, the Court awards damages that are, in some cases, less than the those
plaintiffs seek. The Court hereby awards damages as follows:
•
Gonzalez: $300 (bicycle); $45 (helmet); $50 (two vests); $30 (two lights); $30 (two
wheel replacements); $30 (two brakes);
•
Hernandez: $300 (bicycle); $35 (helmet);
•
Rodriguez: $250 (bicycle); $35 (helmet); $30 (two vests); $70 (two brakes); $60 (two
lights);
•
Marco: $20 (vest); $40 (helmet); $30 (bicycle lights). 31
With regard to defendants’ failure to provide statutorily required wage notices and
statements, the Court hereby awards each plaintiff $50 for each week he did not receive a wage
or more days, he should be credited with having worked both Friday and Saturday, and in weeks
in which he worked four or fewer days, he should be credited with having worked only one of
Friday or Saturday.
31 Marco did not attest to the cost of his bicycle, and did not seek damages for the use of his
bicycle in the proposed damages calculation.
66
notice, up to a maximum of $2,500, and $100 for each week he did not receive a wage statement,
up to a maximum of $2,500.
As described below, the Court will invite the parties to submit revised damages
calculations in accordance with the Court’s findings as set forth in this Opinion.
C.
Liquidated Damages
Both the FLSA and NYLL provide for liability for liquidated damages for an employee’s
unpaid wages. Defendants are liable for liquidated damages under the standards of both statutes.
However, the Court declines to award cumulative liquidated damages awards. The Court instead
makes the liquidated damages awards under the FLSA and the NYLL overlapping, meaning, in
practice, that the larger liquidated damages award (under the NYLL) supplies the measure of
plaintiffs’ recovery. The Court’s reasoning for awarding liquidated damages, while declining to
permit cumulative recovery, follows.
As to the FLSA, an employer who violates the statute’s compensation provisions “shall
be liable to the employee or employees affected in the amount of their unpaid minimum wages,
or their unpaid overtime compensation, as the case may be, and in an additional equal amount as
liquidated damages.” 29 U.S.C. § 216(b). These statutory damages are not a sum certain, but
rather are derivative of compensatory damages. While liquidated damages “are the norm,”
Reich, 121 F.3d at 71, an employer may avoid them if it establishes “by ‘plain and substantial’
evidence, its subjective good faith and objective reasonableness,’” Moon, 248 F. Supp. 2d at 234.
Courts may exercise discretion to deny liquidated damages where the employer shows that even
in violating statutory and regulatory wage, hour, and recordkeeping requirements, it acted in
subjective “good faith” and had objectively “reasonable grounds” for believing that the unlawful
acts did not violate the FLSA. 29 U.S.C. § 260. “To establish the requisite subjective ‘good
faith,’ an employer must show that it took active steps to ascertain the dictates of the FLSA and
67
then act to comply with them.” Hart, 967 F. Supp. 2d at 938 (quoting Barfield, 537 F.3d at 150)
(internal quotation marks omitted). The employer’s burden to prove good faith is “a difficult
one.” Barfield, 537 F. 3d at 150 (quoting RSR, 172 F.3d at 142) (internal quotation marks
omitted).
Similarly, under the NYLL, an employee is entitled to “liquidated damages equal to one
hundred percent of the total amount of wages found to be due,” “unless the employer proves a
good faith basis to believe that its underpayment of wages was in compliance with the law.”
N.Y. Labor Law §§ 198(1–a) (effective April 9, 2011). “[C]ourts have not substantively
distinguished the federal standard from the current state standard of good faith.” Inclan, 95 F.
Supp. 3d at 505.
Here, the Court holds that defendants have failed to satisfy their difficult burden of
showing good faith. They have failed to show, let alone by plain and substantial evidence—
actually, by any evidence—that they acted with subjective good faith. Absent evidence that
defendants took some concrete step to assure compliance with these laws, the Court does not
credit defendants’ conclusory assertions that they “acted in good faith to comply with the FLSA
and the NYLL.” Chaouhan Aff. ¶ 22; Leo Decl. ¶ 21; Rodrigues Aff. ¶ 22. Therefore,
defendants are liable for liquidated damages under both the FLSA and NYLL.
As to the relationship between plaintiffs’ federal and state liquidated damage awards,
“[t]here 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.” Inclan, 95 F. Supp. 3d at 505 (collecting
cases). Plaintiffs urge that cumulative liquidated damages are proper, on the ground that the
liquidated damages provisions of the two statutory schemes serve different functions, with such
68
damages being viewed as compensatory under the FLSA and punitive under the NYLL. Pl. Br.
26–27.32 Numerous courts have indeed so held. See, e.g., Lanzetta v. Florio’s Enters., Inc., No.
08 Civ. 6181 (DC), 2011 WL 3209521, at *5 (S.D.N.Y. July 27, 2011) (liquidated damages
under both statutes permissible because FLSA liquidated damages “are considered compensatory
rather than punitive in nature,” whereas NYLL liquidated damages are punitive because they
“constitute a penalty to deter an employer’s willful withholding of wages due” (quoting Reich,
121 F.3d at 71, and Reilly v. NatWest Mkts. Grp. Inc., 181 F.3d 253, 265 (2d Cir. 1999) (internal
quotation marks omitted)).
However, these decisions predate recent amendments to the NYLL’s liquidated damages
provision, which, in the Court’s view, undermine the conclusion that that provision is punitive.
Before the amendments, the NYLL had provided for liquidated damages only for an employer’s
“willful” violations. See Reilly, 181 F.3d at 264. It was on the basis of the requirement of
willfulness that the Appellate Division, First Department—on which the Second Circuit in Reilly
relied—held the NYLL liquidated damages provision to impose a penalty. See Carter v. FritoLay, Inc., 425 N.Y.S.2d 115, 116 (1st Dep’t 1980) (“Plaintiff contends that the provision for
liquidated damages is not a penalty but additional compensation. We do not find this contention
convincing in light of the application of this provision being expressly conditioned on a finding
of willful conduct on the part of the employer.” (emphasis added)), aff’d, 52 N.Y.2d 994 (1981).
As amended, however, the NYLL liquidated damages provision no longer requires a showing of
willfulness. Effective November 24, 2009, the NYLL has removed the requirement of
willfulness, so as now to provide, like the FLSA, that an employee is entitled to liquidated
32
Defendants’ brief did not address whether plaintiffs’ could collect liquidated damages under
both statutes.
69
damages except where the employer demonstrates its good faith. 2009 N.Y. Sess. Law Ch. 372
(A. 6963) (McKinney’s). In addition, effective April 9, 2011, the NYLL provision was modified
to track the FLSA’s as to the amount of liquidated damages, which may now reach 100% of the
wages owed, as opposed to 25% pre-amendment. 2010 N.Y. Sess. Law Ch. 564 (S. 8380)
(McKinney’s).
Several courts in this District, identifying cumulative liquidated damages as the majority
approach, have continued to stack liquidated damages awards under both statutes even after the
recent amendments to the NYLL. See, e.g., Tackie v. Keff Enters. LLC, No. 14 Civ. 2074 (JPO),
2014 WL 4626229, at *5 (S.D.N.Y. Sept. 16, 2014); Ho v. Sim Enters., Inc., No. 11 Civ. 2855
(PKC), 2014 WL 1998237, *18–19 (S.D.N.Y. May 14, 2014). But, in light of the convergence
that the amendments effect between the NYLL’s and the FLSA’s liquidated damages provisions,
the Court joins those courts to find the earlier distinction between the FLSA’s compensatory
provision and the NYLL’s punitive provision to now be elusive, and to hold that a cumulative
award of liquidated damages would amount to an impermissible double recovery. See, e.g.,
Inclan, 95 F. Supp. 3d at 505–06; Parilla v. Salt & Pepper on 33rd St. Inc., No. 12 Civ. 6382
(AKH), 2013 WL 4536628, at *2 (S.D.N.Y. Apr. 8, 2013); Gortat v. Capala Bros., 949 F. Supp.
2d 374, 381 (E.D.N.Y. 2013) (“[T]he distinction . . . [is] semantic, exalting form over
substance.”); see also Greathouse v. JHS Sec., Inc., No. 11 Civ. 7845 (PAE) (GWG), 2012 WL
3871523, at *7 (S.D.N.Y. Sept. 7, 2012), report and recommendation adopted as modified, 2012
WL 5185591 (S.D.N.Y. Oct. 19, 2012), vacated on other grounds, 784 F.3d 105 (2d Cir. 2015);
see generally Alexander J. Callen, Note, Avoiding Double Recovery: Assessing Liquidated
Damages in Private Wage and Hour Actions Under the Fair Labor Standards Act and the New
York Labor Law, 81 Fordham L. Rev. 1881 (2013) (arguing, based on text, structure, and
70
legislative history of NYLL liquidated damages provision as amended, that the recent
amendments were intended to conform the NYLL to the FLSA, that the provision has a mixed
compensatory and punitive purpose, and that courts should award only one set of liquidated
damages to avoid overlapping damages).
The Court accordingly awards plaintiffs liquidated damages under both provisions, equal
to 100% of the minimum wages, overtime wages, and (as to the NYLL) the spread-of-hours pay
owed under these respective statutes. These awards, however, are overlapping, not cumulative,
such that the larger, NYLL award sets each plaintiffs’ liquidated damages recovery.
D.
Prejudgment Interest
Plaintiffs are entitled to prejudgment interest on their NYLL spread-of-hours claims, the
only claims on which they seek prejudgment interest.
Prejudgment interest, under both federal and New York law, compensates a plaintiff for
the defendant’s interest-free use of the money owed to the plaintiff. See Brooklyn Sav. Bank v.
O'Neil, 324 U.S. 697, 714–15 (1945) (FLSA); Reilly, 181 F.3d at 265 (NYLL). Under the
FLSA, as reviewed above, liquidated damages have also been held compensatory, and therefore,
“[i]t is well settled that in an action for violations of the [FLSA] prejudgment interest may not be
awarded in addition to liquidated damages.” Brock v. Superior Care, Inc., 840 F.2d 1054, 1064
(2d Cir. 1988) (per curiam); see also Brooklyn Sav. Bank, 324 U.S. at 714–15, (“To allow an
employee to recover the basic statutory wage and liquidated damages, with interest, would have
the effect of giving an employee double compensation for damages arising from delay in the
payment of basic minimum wages”).
As to the NYLL, “[c]ourts typically award prejudgment interest on damages for NYLL
violations.” McLean v. Garage Mgmt. Corp., No. 09 Civ. 9325 (DLC), 2012 WL 1358739, at
*10 (S.D.N.Y. Apr. 19, 2012). Historically, the case law permitting the award of prejudgment
71
interest alongside an award of liquidated damages for NYLL violations relied on the distinction
between the punitive purpose of NYLL liquidated damages and the compensatory purpose of
prejudgment interest. See Reilly, 181 F.3d at 265. The Court has held that liquidated damages
under the NYLL no longer are clearly punitive. However, a separate basis applies for the award
of prejudgment interest alongside a liquidated damages award. As recently amended, the NYLL
expressly provides for a plaintiff to receive both types of awards. See N.Y. Labor Law § 198(1a) (“[T]he court shall allow [an] employee to recover . . . prejudgment interest as required under
the civil practice law and rules, and, unless [the employer proves good faith], an additional
amount as liquidated damages . . . .”); 2010 N.Y. Sess. Law Ch. 564 (S. 8380) (McKinney’s).
The Court therefore finds that plaintiffs are entitled to prejudgment interest on their
NYLL claims to the extent they have pursued it—i.e., on their spread-of-hours claims. 33
Prejudgment interest is to be calculated pursuant to the New York prejudgment interest rate of
nine percent (9%) per annum simple interest from a single reasonable intermediate date. N.Y.
C.P.L.R. §§ 5001(b), 5004; McLean, 2012 WL 1358739, at *11. Therefore, prejudgment interest
shall be calculated from the median date between each plaintiff’s start date and end date of
employment at Spice Symphony.
E.
Attorneys’ Fees and Costs
Both the FLSA and NYLL provide for prevailing plaintiffs to be awarded attorneys’ fees
and costs for actions to recover unpaid wages. 29 U.S.C. § 216(b) (“The court . . . shall . . .
allow a reasonable attorney’s fee to be paid by the defendants, and costs of the action.”); N.Y.
33
Plaintiffs have not sought prejudgment interest for their NYLL minimum wage and overtime
claims. The Court has no occasion here to consider whether an award of prejudgment interest
would have been available on those claims.
72
Lab. Law § 663(1) (prevailing employee shall recover underpayments “together with costs all
reasonable attorney’s fees”).
The Court therefore holds that plaintiffs are entitled to recover costs and reasonable
attorneys’ fees, upon a proper showing of such costs and fees.
F.
Judgment Unpaid Within 90 Days
The Court holds that “if any amounts [of damages awarded under the NYLL] remain
unpaid upon the expiration of ninety days following issuance of judgment, or ninety days after
expiration of the time to appeal and no appeal is then pending, whichever is later, the total
amount of judgment shall automatically increase by fifteen percent.” N.Y. Lab. Law § 198(4).
CONCLUSION
In consideration of the foregoing findings of fact and conclusions of law, the Court finds
that plaintiffs have proven, by a preponderance of the evidence, that defendants JRPAC Inc.,
(d/b/a Spice Symphony), Jude Rodrigues, Chad Leo, and Premendra Chaouhan violated the Fair
Labor Standards Act and New York Labor Law by failing to pay minimum and overtime wages,
as well as by failing to pay spread-of-hours pay and to provide wage notices and statements as
required under the New York Labor Law. For these violations, the Court awards plaintiffs
compensatory and liquidated damages, statutory damages, and prejudgment interest on the
spread-of-hours damages.
The Court’s conclusions of fact, conclusions of law, and conclusions as to aspects of
damages differ from those proposed by the parties. And the damages calculations necessitated
by this decision require multiple calculations, with respect to each plaintiff and cause of action.
These calculations are best performed, in the first instance, by counsel. Accordingly, the Court
73
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