Gamero et al v. Koodo Sushi Corp. et al

Filing 80

OPINION AND ORDER re: 1 COMPLAINT: For the reasons set forth above, the Court concludes that Plaintiffs are entitled to relief under their First through Seventh Causes of Action. The Clerk of Court is directed to prepare a judgment reflecting th e Court's holding and setting forth Plaintiffs' damages as follows: Sanchez: $2,311.58 in unpaid wages under the NYLL, with 9% prejudgment interest beginning to accrue on April 9, 2012; $972.43 in liquidated damages; and & #036;2,500.00 for Defendants' violation of NYLL § 195(3). Mastranzo: $3,668.07 in unpaid wages under the NYLL, with 9% prejudgment interest beginning to accrue on July 30, 2012; $2,915.04 in liquidated damages; and $ 2,500.00 for Defendants' violation of NYLL § 195(3). Gamero: $2,535.00 in unpaid wages under the NYLL, with 9% prejudgment interest beginning to accrue on August 5, 2013; $2,535.00 in liquidated damages; $2,500.00 for Defendants' violation of NYLL § 195(1); and $2,500.00 for Defendant' violation of NYLL § 195(3). "[I]f any amounts remain unpaid upon the expiration of ninety days following issuance of judgment, or ninety day s 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." NYLL § 198(4). Plaintiffs are also entitled to recover their co sts and "reasonable attorney's fees." NYLL § 663(1). Given that Plaintiffs' recovery is far smaller than they requested, the Court strongly encourages the parties to reach a mutual agreement on attorney's fees and cost s. In the event the parties cannot reach consensus, Plaintiffs are ORDERED to file a motion for fees and costs on or before October 25, 2017. Defendants shall oppose the motion on or before November 8, 2017. Plaintiffs may not file a reply brief. The Clerk of Court is directed to terminate all pending motions, adjourn all remaining dates, and close this case. SO ORDERED. (Signed by Judge Katherine Polk Failla on 9/28/2017) (anc) Modified on 9/28/2017 (anc).

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------------------------X
:
ISRAEL GAMERO, NORBERTO
:
MASTRANZO, and OSCAR SANCHEZ,
:
individually and on behalf of others similarly :
situated,
:
:
Plaintiffs,
:
:
v.
:
:
KOODO SUSHI CORP., d/b/a KOODO
:
SUSHI, RAYMOND KOO, and MICHELLE
:
KOO,
:
:
Defendants. :
:
------------------------------------------------------ X

USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
September 28, 2017
DATE FILED: ______________

15 Civ. 2697 (KPF)
OPINION AND ORDER

KATHERINE POLK FAILLA, District Judge:
Plaintiffs Israel Gamero, Norberto Mastranzo, and Oscar Sanchez are
former employees of Defendant Koodo Sushi, a Manhattan restaurant. In
2015, Plaintiffs sued Koodo Sushi and its owner, Defendant Michelle Koo
(together with Koodo Sushi, “Defendants”), 1 claiming that Defendants had
committed wage-and-hour and recordkeeping violations of the Fair Labor
Standards Act, 29 U.S.C. §§ 201-219 (the “FLSA”), and the New York Labor

1

Plaintiffs also sued Raymond Koo, Michelle Koo’s brother. (Dkt. #1; see Trial Transcript
(“Tr.”) 176)). The parties now agree that “Raymond Koo does not [participate] and has
not participated in the ownership, operation, or control of Koodo Sushi.” (Joint Pretrial
Order (“JPTO” (Dkt. #62)), Joint Stipulation of Fact 2). The Court thus understands
that Plaintiffs have abandoned any claims they once asserted against Raymond Koo. All
references to “Koo” in this Opinion refer only to Michelle Koo.
The Court pauses to commend the work of Latham & Watkins LLP, which began
representing Defendants on a pro bono basis shortly before trial began. The conduct of
the Latham attorneys at trial, and the quality of their written submissions, merits the
Court’s appreciation and approbation.

Law, §§ 190-199A, 650-665 (the “NYLL”). This case proceeded to a bench trial
in October 2016. This Opinion constitutes the Court’s Findings of Fact and
Conclusions of Law pursuant to Federal Rule of Civil Procedure 52.
The Court has reviewed the transcript of the trial, the trial exhibits, and
the parties’ post-trial submissions. And the Court has considered those
materials in light of its own recollections of the trial and its perception of the
credibility of the witnesses who testified. The Court concludes that Plaintiffs
are entitled to relief on seven of their nine claims against Defendants. But the
Court also concludes that Plaintiffs may recover only a fraction of the damages
they seek — in total, $24,937.12, plus prejudgment interest.
FINDINGS OF FACT 2
The bulk of the parties’ dispute, as presented at trial, centered on two
questions: First, how many hours per week did Plaintiffs work at Koodo Sushi?
And second, how much did Koo pay Plaintiffs for their work? Each side
answered these questions differently, and the Court found evidentiary
problems with both Plaintiffs’ and Defendants’ cases.
Plaintiffs all testified that they worked over 50 hours per week for most of
their tenures at Koodo Sushi. (Pl. FF ¶¶ 9-10, 22, 35-36). They also claimed
that Koo paid them fixed salaries — per shift for Gamero, and per week for

2

This Opinion cites to several documents, including the transcript of the trial and the
exhibits that Plaintiffs (“Pl. Ex.”) and Defendants (“Def. Ex.”) introduced; Plaintiffs’
Proposed Findings of Fact and Conclusions of Law (Dkt. #75), which is subdivided into
Findings of Fact (“Pl. FF”) and Conclusions of Law (“Pl. CL”); Defendants’ Proposed
Findings of Fact and Conclusions of Law (“Def. FFCL” (Dkt. #76)); Defendants’ post-trial
brief (“Def. Br.” (Dkt. #77)); the JPTO; a Stipulation of Fact the parties executed midtrial (“10/19/16 Stipulation”); and Plaintiffs’ Complaint (“Compl. (Dkt. #1)).

2

Mastranzo and Sanchez — that fell below then-prevailing federal and state
minimum wage statutes. (Id. at ¶¶ 12, 24-25, 38-40; Pl. CL ¶ 106).
But in general, Plaintiffs’ accounts of their hours and wages did not
square with the payroll records Defendants submitted. Relying on those
records and Koo’s recollection of how she operated her restaurant, Defendants
argued that Plaintiffs had overestimated — and in Gamero’s case, substantially
overestimated — their hours. (See Def. FFCL ¶¶ 78-81, 102-03, 105-06, 111,
138, 146, 152, 155-57). Defendants also contended that Koo paid Plaintiffs by
the hour, at rates that met or exceeded minimum wage, either in the first
instance or once certain credits were deducted. (See id. at ¶¶ 87-88, 107-08,
114-15, 140-43, 148-49).
To be sure, the Court was troubled by many issues with Defendants’
payroll records. Koo inconsistently tracked Plaintiffs’ hours and wages. Some
of her records are confusing; some are nearly illegible. But in the main,
Defendants’ account of Plaintiffs’ hours and wages was more credible than the
accounts Plaintiffs offered. Koo, in addition to evincing genuine concern for her
employees’ well-being, was by far the most credible witness at trial, and the
Court largely accepted her testimony concerning the accuracy of the records
she kept.
Against the backdrop of this global point, the Court will set forth its
Findings of Fact. The Court will begin by listing its factual findings concerning
Koodo Sushi and its general business practices. The Court will then turn to
Koo and discuss how she calculated her employees’ wages, and how she
3

maintained payroll records. Finally, the Court will explain its findings
concerning the hours and wages of Sanchez, Mastranzo, and Gamero.
A.

Koodo Sushi
Koodo Sushi is a Japanese restaurant located in the Financial District of

downtown Manhattan. (JPTO, Joint Stipulation of Fact 2). Its business has
declined in recent years: Koodo Sushi recorded $763,389 in gross receipts in
the 2013 tax year, $520,242 in the 2014 tax year, and $493,039 in the 2015
tax year. (10/19/16 Stipulation).
During the time Plaintiffs worked at Koodo Sushi — 2009 to 2015 — the
restaurant was open to customers from 11:00 a.m. to 3:00 p.m. and 5:00 p.m.
to 10:00 p.m. on weekdays, and from 5:00 p.m. to 10:00 p.m. on weekends.
(Def FFCL ¶¶ 8, 10; see Tr. 19-20, 177, 320). From 11:00 a.m. to 3:00 p.m.,
Koodo Sushi serves lunch; from 5:00 p.m. to 10:00 p.m., it serves dinner.
(Tr. 179).
Most of Koodo Sushi’s lunch customers eat in the restaurant, and the
restaurant usually gets busy between just after noon and 2:00 p.m. (Tr. 179).
By contrast, most of Koodo Sushi’s dinner business is delivery; 7:00 p.m. is the
busiest part of Koodo Sushi’s dinner shift. (Id. at 179-80). Koo stops accepting
dine-in customers at 9:00 p.m., and stops taking delivery orders at 9:50 p.m.
(Id. at 186). Usually, Koodo Sushi’s employees leave the restaurant promptly
at 10:00 p.m. (Id. at 321-2).
On weekdays from 3:00 p.m. to 5:00 p.m., all Koodo Sushi employees
take a “nap break,” although some employees will leave the restaurant to go
4

shopping or attend to personal matters during this period. (Tr. 186-87, 308;
see also id. at 31). Koodo Sushi’s “lights are off” from 3:00 p.m. to 5:00 p.m.,
and the restaurant is closed for business. (Id. at 187-88, 321). Koodo Sushi
employees also enjoy two meal breaks during the day: a mid-day lunch around
2:00 p.m. to 2:30 p.m., and an evening dinner around 8:30 p.m. to 9:00 p.m.
(Id. at 179, 182, 308-09). Koodo Sushi provides the food for these meals. (Id.
at 309).
B.

Koo’s Wage Calculations and Payroll Records
Koo owns Koodo Sushi. (JPTO, Joint Stipulation of Fact 2). And by

Koo’s account, she alone is responsible for determining how — and how
much — her employees are paid. (Tr. 189).
Even before Plaintiffs filed this lawsuit, Koo had a measure of difficulty
carrying out these tasks. In 2008, the New York Department of Labor
investigated Koo for spread-of-hours and overtime violations, and Koo
ultimately paid a $2,000.00 fine. (Tr. 13, 359-60). As a result of that
investigation, Koo learned about several wage-and-hour laws, including New
York’s spread-of-hours requirement, and the ability of employers to deduct tip
and meal credits from their employees’ wages. (See id. at 188-90, 374-75).
Defendants concede that “Koo’s efforts to comply with” federal and state
wage-and-hour “laws may well have been imperfect.” (Tr. 13). The evidence at
trial made this plain. Below, the Court explains how Koo calculated her
employees’ wages and how she maintained payroll records.

5

1.

Koo’s Wage Calculations

Koo paid her employees on a “weekly or biweekly” schedule. (Tr. 189).
She paid all three Plaintiffs by the week, in cash. (Id.). To determine how
much her employees were due each week, Koo calculated their hourly wages.
(Id.). Thus, her employees’ weekly take-home pay varied depending on how
many hours they worked in a given week. (Id. at 189-90). But in general,
Koo’s employees earned the same amount of money week over week, because
their schedules were “very fixed.” (Id.).
Koo testified that any Koodo Sushi employee who received minimum
wage would be paid at that rate for 40 hours of work per week. (Tr. 193). If a
minimum-wage employee worked more than 40 hours in a week, they would be
paid time and a half. (Id.). Koo also deducted a meal credit from her
employees’ wages: She testified that the amount of the meal credit was $2.50
in 2008 (as the Department of Labor investigator explained to Koo), and it later
decreased to $1.50. (Id. at 191-92). For each meal break her employees took,
Koo would deduct 30 minutes from their daily compensable working hours.
(Id. at 192-93). Koo also deducted a tip credit from certain employees’ hourly
wages. (Id. at 190-92).
The actual wages Koodo Sushi’s employees received varied depending on
what job they fulfilled at the restaurant. Kitchen workers earned minimum
wage as a baseline, but Koo would pay them more “based on their technical
skill.” (Tr. 190). A kitchen worker whose “job … required more skill” would
thus earn more “per hour.” (Id.; see id. at 391-93 (Koo explaining that she
6

increased Sanchez’s hourly rate when he learned how to prepare a new type of
sushi roll)). Koodo Sushi’s dishwashers earned minimum wage. (Id. at 190).
Delivery workers would receive minimum wage, less a tip credit. (Id.). Koo
explained that, accounting for meal and tip credits, delivery workers were owed
$3.85 per hour, but she paid them $5.00 per hour. (Id. at 190-91).
Koodo Sushi accepted delivery orders by phone and through online
ordering, and Koo processed the tips her employees earned based on how
customers paid those tips. When a customer called in a delivery order and
tipped a Koodo Sushi delivery person in cash, that delivery person would take
his tip “directly from [the] customer’s hands.” (Tr. 235). If, instead, a call-in
customer paid a tip by credit card — by indicating the amount they wished to
tip on their receipt — Koo would pay the employee who made that delivery “the
exact amount” on the receipt with cash from the register. (Id. at 235-36).
Koo processed tips from online orders differently. Koodo Sushi used two
third-party vendors — Delivery.com and Seamless Web (“Seamless”) — to
accept online delivery orders. (Tr. 237). Delivery.com would take an
unspecified commission from the cost of the meals customers ordered, but not
from the tips customers paid Koodo Sushi’s delivery people. (Id. at 238). Thus,
if a Koodo Sushi delivery person fulfilled a delivery placed through
Delivery.com, he would receive the full amount of his tip. (Id. at 386-87).
Seamless, in contrast, took an approximately 14% commission “of the
money” — including tips — Koodo Sushi derived from orders placed through

7

Seamless. (Id. at 239). 3 Thus, Koodo Sushi’s delivery workers would receive
the tips that Seamless customers placed, less Seamless’s 14% commission.
(Id.). Koodo Sushi would not “make up the difference.” (Id. at 240).
Because Delivery.com did not take a commission from delivery tips, but
Seamless did, Koo offered her employees the option of not making deliveries
placed through Seamless. (Tr. 240-41). On a date Koo could not recall, she
wrote a letter extending this offer to her employees, “and every single
one” — including Plaintiffs — “signed it.” (Id. at 241). The letter was not
introduced into evidence at trial; Koo recalled that the letter explained to her
employees the “consequence” of making Seamless deliveries. (Id. at 386-87).
The letter was in English, not Spanish. (Id. at 387). None of Koodo Sushi’s
employees chose to forego making Seamless deliveries. (Id. at 241). Koo also
testified that it was her “regular procedure” to remind her employees that
Seamless withheld a portion of delivery tips. (Id. at 242).
The Court credits Koo’s testimony that she calculated her employees’
wages by the hour, accounting for minimum wage and applicable credits. But
Koo failed to communicate many of her calculations to Plaintiffs. On cross
examination, Koo conceded that between 2009 and 2015, she did not give any
of her employees Spanish-language employment documents. (Tr. 369-70). Koo
also did not give all of her new employees written notices for their own records

3

Koo testified that Seamless’s commission consisted of (i) a 13.8% standard commission
and (ii) an extra 0.05% commission Koodo Sushi paid in order to receive the money it
earned from Seamless orders one month after the orders were placed, instead of two
months. (Tr. 238-39).

8

setting forth their hourly wages. (Id. at 369; cf. id. at 249-50, 253 (Koo
recalling that sometime after she hired Sanchez, a “translator” wrote out for
Sanchez “a small list” of Sanchez’s hours and weekly pay in Spanish)). And
although Koo would explain to her employees that she was deducting tip and
meal credits from their pay, she never committed these explanations to paper.
(Id. at 371-73; cf. Def. Ex. O (schedule Koo prepared for Sanchez, on which Koo
calculated Sanchez’s wages and wrote “Less Lunch + Dinner Meal”). Koo
testified that she tries to stay current with wage-and-hour laws by visiting “the
website” (for the New York Department of Labor, the Court inferred) each
December. (Tr. 301). While the Court credits Koo’s good intentions, her efforts
to comply with those laws have been deficient in several respects.
2.

Koo’s Payroll Records

Before explaining the various methods Koo used to track her employees’
hours and wages, the Court makes two general points. First, there is no single
document that sets forth Plaintiffs’ working hours and wages in full. Instead,
the records Defendants introduced at trial were akin to pieces of a puzzle:
Only by reading them in tandem could the Court discern a coherent (but not
totally complete) account of Plaintiffs’ hours and wages. Second, between 2009
and 2015, Koodo Sushi did not have a system employees could use “to punch
in and out” of work. (Tr. 378). Even today, Koodo Sushi’s employees do not
“sign in when they come” to work or “sign out when they” depart. (Id. at 407).
But although Koo’s payroll records were somewhat haphazard, Koo
explained them in a way the Court understood. Koo also delivered a consistent
9

account of the shifts Plaintiffs worked and the wages she paid them. And as a
result, Koo demonstrated why her payroll records substantiate Defendants’
arguments about Plaintiffs’ hours and wages.
With these caveats in mind, the Court addresses the five types of payroll
records Defendants introduced at trial: (i) login sheets; (ii) delivery login sheets;
(iii) Seamless delivery reports; (iv) the Aldelo system; and (v) Koo’s calendar.
a.

Login Sheets

After the New York Department of Labor investigated Koodo Sushi in
2008, Koo began hanging employee login sheets on the wall of the restaurant’s
kitchen. (Tr. 195-96; see, e.g., Def. Ex. E). The sheets had spaces for Koodo
Sushi’s employees to sign in each morning and sign out each night. (Def.
Ex. E, V-17). Koo continued preparing these sheets on a weekly basis through
early 2013, although Koo recalled “a period of time” between 2008 and 2013
when she stopped using these sheets. (Id. at 197-99).
The login sheets achieved mixed results. Although Koo instructed her
employees to sign the login sheets — and threatened not to pay them if they
failed to do so — the employees complied irregularly. (See Tr. 195-96, 198).
And sometimes, Koodo Sushi employees would sign in for each other:
Mastranzo, for example, testified that his co-worker Tito would occasionally fill
out Mastranzo’s section of a login sheet “as a joke.” (Id. at 108, 113-15). On
cross-examination, Koo “agree[d]” with defense counsel that the login “sheets
were not accurate representations of the[ ] hours” Plaintiffs “worked.” (Id. at
383).
10

Assuming that none of her employees disputed how much they were paid
in a given week, Koo would throw away that week’s login sheet. (Tr. 384). Koo
did not believe she needed to maintain these records. (Id. at 384-85).
b.

Delivery Login Sheets

Koo used a different type of login sheet for delivery employees.
(Tr. 291-92; see Def. Ex. A, B, V-1). Koo would print these delivery login sheets
each month, “put [them] in a binder,” and place the binder “on [a] table.”
(Tr. 291). Koo testified that these sheets displayed the shifts that Koodo Sushi
delivery people worked, and also the wages they received. (Id. at 291-92).
c.

Seamless Delivery Reports

Koo also used daily Seamless delivery reports to record payments to her
delivery employees. (Tr. 201-02, 242-43). These reports were computerized;
Koo would print them out and write on them the names of delivery employees
who worked in a given week. (Id. at 242; see Def. Ex. I). So, for example, on a
report dated June 26, 2014, Koo wrote “Israel” (for Plaintiff Gamero), then
indicated the tips Gamero received from Delivery.com and Seamless orders on
Tuesday, Wednesday, Thursday, and Friday of that week. (Tr. 243; Def. Ex. I).
And on the right side of this June 26, 2014 report, Koo circled two numbers —
“80.16 + 60” — which indicated, respectively, the tips Gamero received and his
hourly wages for that week. (Tr. 243-44; Def. FFCL ¶ 64).
d.

Aldelo

From 2010 through 2013, Koo recorded her employees’ hours and wages
using Aldelo, a computerized payroll system. (Tr. 217-18). Koo’s Aldelo
11

records were by far the most coherent — and helpful — exhibit that Defendants
introduced at trial. (See Def. Ex. L).
Each time Koo was ready to pay a Koodo Sushi employee, Koo (or, if Koo
was on vacation, Koodo Sushi employee Zha Wong) would make an entry in
Aldelo. (Tr. 218-19). Through Aldelo, Koo would then print (on thermographic
paper that, over time, has faded to varying degrees) a paystub indicating how
much that employee would be receiving. (Id. at 223, 233-34; see Def. Ex. G).
Koo made her employees sign these paystubs before she paid them. (Tr. 223;
see Def. Ex. G, J). The paystubs were dated in two ways: They indicated (i) the
date and time Koo generated the paystub and (ii) the pay period for which the
employee signing the paystub was being compensated. (Tr. 223; see Def.
Ex. J).
Aldelo generated a global record — the “Pay Out Details Report” — of the
payment entries Koo made in the program. (Tr. 230-32, Def. Ex. L). At trial,
Defendants introduced a version of the Pay Out Details Report reflecting the
payments Koo made to Plaintiffs. (Def. Ex. L). Each line of this document
corresponds to an individual paystub Koo generated through Aldelo. (Tr. 223,
232-33; see Def. Ex. L). The Pay Out Details Report has five columns:
i.

“Paid To”: This column indicated the name of the
employee who received a given paystub and that
employee’s role at Koodo Sushi. (Tr. 223). “Israel D”
corresponded to Gamero, a delivery worker; “Oska K”
signified Sanchez, who worked in the kitchen; and “Rob
K” was Mastranzo, who also worked in the kitchen. (Id.
at 220-21; see generally Def. Ex. L).

ii.

“Date/Time”: This column indicated the date and time
that Koo created a paystub. (Tr. 223).
12

iii.

“Amount Paid”: This column displayed the value of
each paystub reflected in the Pay Out Details Report.
(Tr. 223).

iv.

“Description”: These entries showed the pay period to
which a paystub corresponded. (Tr. 223-24). Some of
these entries display a range of dates (e.g., “12/311/6/13”), while others show a single date (e.g., “9-Jun”).
(Def. Ex. L., at 2142-43).
Other entries in the
Description column read “tips” (to show tips an
employee received) or “extra” (for “extra performance”
payments Koo gave her employees when they completed
an “extra job”). (Tr. 225).

v.

“Paid By”: Finally, the Pay Out Details Report’s fifth
column showed which Koodo Sushi employee generated
the paystubs reflected in the report; in almost every
case, this was Koo. (Tr. 224; see Def. Ex. L).

Koo explained that the Pay Out Details Report is the best source of
information about the wages she paid her employees between 2009 and 2013.
(Tr. 233). The Court agrees.
e.

Koo’s Calendar

In late 2013 or early 2014, Koo stopped using Aldelo and instead began
recording some of her employees’ shifts and wages in a calendar. (Tr. 209, 213,
217; Def. Ex. K). Entries for payments Koo made to Sanchez and Mastranzo
(but not Gamero) appear throughout the calendar. (Id. at 210; see generally
Def. Ex. K). 4
An example from the calendar helps explain how Koo used it. In a box
dated January 12, 2014, the name “Rob” (for Mastranzo) appears; next to

4

Defendants introduced a scanned copy of the calendar at trial. (Def. Ex. K). They also
submitted to the Court the original calendar, which has much larger pages than the
scanned exhibit version. In drafting this Opinion, the Court generally relied on the
original calendar because it is easier to read.

13

“Rob,” Koo wrote “400,” which indicates how much Koo paid Mastranzo for the
work he performed in the preceding week (January 6 through January 12).
(Tr. 210-11; Def. Ex. K, at 2157). In this same box, Koo also wrote “Oska” (for
Sanchez”) and “1/10,” which indicates that Koo paid Sanchez on January 10.
(Tr. 210; Def. Ex. K, at 2157). The Aldelo Pay Out Details Report states that
Koo paid Sanchez $556.65 on that date. (Def. Ex. L, at 2145). In other
calendar entries — April 20, 2014, for example — Koo wrote a date next to
“Oska” (“4/17”), and the amount Sanchez was paid on that date ($550.00)
appears in the April 17, 2014 calendar entry. (Def. Ex. K, at 2162).
Many early 2014 calendar entries also indicate the shifts (and, by
extension, the number of hours) that Sanchez and Mastranzo worked in a given
day. On January 8, 2014, for example, Koo wrote “11-3” and “5-10” next to
“Oska” and the same numbers next to “Rob.” (Def. Ex. K, at 2157). But Koo
abandoned this practice over time; instead, she used the calendar to keep track
of when her employees deviated from their normal work schedules. (Tr. 21415). Koo explained that she stopped recording her employees’ daily schedules
on the calendar because (more glibly) she “was lazy” and (less glibly) she “was
working so long.” (Id. at 213-14).

14

3.

Plaintiffs’ Hours and Wages 5

One major takeaway of the trial was that Koo paid her employees by the
hour. (Tr. 189). As a result, Plaintiffs’ wages varied depending on how many
hours they worked per week. Below is a general summary of Plaintiffs’ hours
and wages; the Court will consider these figures at a more granular level when
it calculates Plaintiffs’ damages in the Conclusions of Law section of this
Opinion.
a.

Sanchez

Sanchez worked at Koodo Sushi from August 2009 through February
2015. (Tr. 15-16; see id. at 245, Def. FFCL ¶ 136). For his first month of
employment, Sanchez was a dishwasher and delivered food. (Tr. 22). Then,
Koo asked Sanchez if he “wanted to learn how to prepare sushi,” and Sanchez
said he did. (Id. at 22, 245). Sanchez continued working as a sushi chef until
he left Koodo Sushi. (Id. at 24).
For most of his employment at Koodo Sushi, Sanchez worked the same
schedule: 11:00 a.m. to 3:00 p.m. and 5:00 p.m. to 10:00 p.m. on weekdays,
and 5:00 p.m. to 10:00 p.m. on one weekend day. (Def. FFCL ¶¶ 138, 146;
Tr. 23-24). Between December 2014 and February 2015, Sanchez worked on a

5

Plaintiffs testified that they were required to purchase various items — “tools of the
trade” — in order to work at Koodo Sushi. (Tr. 32-35, 86-87, 134). The Court credits
none of this testimony. Koo and non-party defense witness Joe Zhou explained that
Plaintiffs were not required to purchase any items to work at Koodo Sushi, and they
testified credibly that Koodo Sushi provided many of the items Plaintiffs allegedly
purchased. (Id. at 268-72, 285, 309-10, 314). The Court thus rejects Plaintiffs’
testimony on this score.

15

“half time” schedule: He was at the restaurant from 11:00 p.m. to 3:00 p.m. on
weekdays. (Id. at 25, 27).
Sanchez’s salary also varied throughout his time at Koodo Sushi. When
Sanchez started at the restaurant, Koo paid him $350.00 per week. (Tr. 25152; Def. Ex. O). That rate reflected payment for 40 hours of dishwashing work
at minimum wage ($7.25), plus 10 hours of delivery work at a lower rate
($4.25) for which Sanchez would be paid time and a half ($6.375). (Tr. 251-52;
Def. Ex. O). Once meal and tip credits were deducted, Sanchez’s weekly takehome pay (by Koo’s calculations) should have been “way less than” $350.00,
but Koo paid him this higher amount anyway. (Tr. 252).
Sanchez earned more as a sushi chef. Koo gave Sanchez periodic raises
when, for example, Sanchez learned how to prepare a special sushi roll.
(Tr. 261). Koo would also give Sanchez a bonus of $10.00 per day if he did not
make any major mistakes on the job. (Id. at 261-62). At his peak, Sanchez
was earning a regular wage of $9.00 per hour at Koodo Sushi. (Id.). And as
the Pay Out Details Report confirms, Koo occasionally paid Sanchez for extra
tasks he performed at the restaurant. (Id. at 225; Def. Ex. L, at 2143, 2148).
b.

Mastranzo

Mastranzo worked at Koodo Sushi from January 2010 until February
2015. (Def. FFCL ¶ 99; cf. Tr. 72-73 (Mastranzo testifying that he began
working at Koodo Sushi in June 2010)). Initially, Mastranzo washed dishes
and cleaned the restaurant, and about a year after coming onboard he also
made deliveries in the evening. (Id. at 79, 288-89). Mastranzo generally
16

worked at Koodo Sushi from 11:00 a.m. to 3:00 p.m. and 5:00 p.m. to 10:00
p.m. on weekdays, and from 5:00 p.m. to 10:00 p.m. on one weekend day. (Id.
at 291, 295; Def. Ex. K, at 2157; Def. Ex. V-1). Koo paid Mastranzo minimum
wage for the hours of the day when he washed dishes and $5.00 per hour when
he made deliveries. (Tr. 399-400).
c.

Gamero

Gamero began working at Koodo Sushi in November or December 2012
and left in March or April 2015, with a roughly one-year gap in between.
(Tr. 132, 135, 277; Def. FFCL ¶¶ 74-74; Pl. Ex. 3, at 1412). Gamero was a
delivery person; he worked part-time a few days per week. (Tr. 275, 284-85).
When Koo hired Gamero, she offered him the opportunity to make deliveries
from 6:00 p.m. to 8:00 p.m., or 6:00 p.m. to 10:00 p.m. (Id. at 279). Gamero
vacillated between these two shifts over time, and Koo agreed to pay him $5.00
per hour (again, minimum wage minus tip and meal credits, plus a “cushion”).
(Id. at 275-76, 279-81; Def. Ex. F). Koo recalled that the most Gamero ever
worked in a single week was “[m]aybe” 30 hours, and “[d]efinitely not 40.” (Id.
at 277).
The Court has already explained that, in large part, it is accepting
Defendants’ take on Plaintiffs’ hours and wages. With that said, Sanchez’s and
Mastranzo’s recollections of their working hours were not that different from
Koo’s recollections of the same. This was not the case for Gamero. There were
major gaps in Gamero’s testimony, and he made many statements that were
not believable. Gamero, in short, was not a credible witness.
17

To start, Gamero gave a confusing and inconsistent account of the
number of months he worked at Koodo Sushi. He testified that he began
working at the restaurant in November 2011. (Tr. 117). But the Aldelo Pay
Out Details Report indicates that the first payment Gamero received was in
December 2012, and there is a November 29, 2012 Seamless delivery report
that appears to bear Gamero’s signature. (Def. Ex. L, at 2142; Pl. Ex. 3, at
1412). Gamero also claimed that beginning in November 2013, he took a yearlong break from Koodo Sushi. (Tr. 120, 132). However, Koo paid Gamero for
work he performed at Koodo Sushi in mid-2014. (Id. at 152; Def. Ex. V-21).
Further, on cross-examination, Gamero conceded that he was “not certain how
many months [he] worked when [he] returned after being absent for a year.”
(Tr. 152-53).
Gamero also inflated his hours. Gamero claimed that on his first day of
work, Koo told him that he would be working from 11:00 a.m. to 3:00 p.m. and
from 5:00 p.m. to 10:00 p.m. on weekdays, and from 5:00 p.m. to 10:00 p.m.
on Sundays. (Tr. 120). That schedule is suspiciously similar to the schedules
Sanchez and Mastranzo — both of whom performed at least some non-delivery
work every day — worked at Koodo Sushi. It also did not accord with
documents Gamero signed indicating that he worked less than half that much
per week. (Def. Ex. V-40; see Tr. 147-49 (Gamero admitting that he signed
Seamless delivery report indicating he worked nine hours in one week, but
claiming that the document was incorrect and that he did not look at the “9
HRS” appearing next to his signature)). And the Court found it unlikely that
18

Koo would pay Gamero to make deliveries for four hours during Koodo Sushi’s
lunch shift, given that the majority of Koodo Sushi’s lunch customers dined in,
and given that Koo had a full-time delivery worker — Zhang Yao Zhong — on
staff. (Tr. 179, 324).
Gamero’s testimony about how much Koo paid him was similarly
implausible. He testified that Koo paid him $15.00 per shift (11:00 a.m. to
3:00 p.m., and 5:00 p.m. to 10:00 p.m.), for a total of $30.00. (Tr. 121-22).
But on cross, Gamero admitted that there were multiple weeks when he earned
$90.00 for 18 hours of work (i.e., Koo paid Gamero $5.00 per hour). (Id. at
145-47; see Def. Ex. V-29, V-34).
Gamero made other statements that undermined his credibility. Gamero
testified that Koo made him vacuum Koodo Sushi’s stairs each morning, and
that this task took him half an hour. (Tr. 118). But on cross-examination,
Gamero estimated that the restaurant had about 15 stairs, which would mean
that he spent approximately two minutes vacuuming each of them. (Id. at
161). Gamero also testified that Koo instructed him to cut cardboard every
weekday for one hour between 2:30 p.m. and 3:30 p.m. (Id. at 119-20). On
cross, Gamero claimed that he cut 60 to 70 pieces of cardboard per day; when
asked whether he spent a full minute cutting each piece of cardboard, Gamero
admitted that he did not. (Id. at 162). And Gamero testified that he purchased
two bicycles in order to make deliveries for Koodo Sushi, without explaining
why one would have been insufficient. (Id. at 134).

19

In sum, Gamero presented an inconsistent — and in many times,
false — account of his hours and wages. The Court found him not credible.
CONCLUSIONS OF LAW
Plaintiffs asserted nine causes of action in their Complaint, and they
pursued all nine at trial:
i.

First Cause of Action: Violation of the minimum wage
provisions of the FLSA.

ii.

Second Cause of Action:
provisions of the FLSA.

iii.

Third Cause of Action:
Minimum Wage Act.

iv.

Fourth Cause of Action:
provisions of the NYLL.

v.

Fifth Cause of Action: Violation of the Spread of Hours
Wage Order of the New York Commissioner of Labor.

vi.

Sixth Cause of Action: Violation of the notice and
recordkeeping requirements of the NYLL.

vii.

Seventh Cause of Action:
Violation of the wage
statement provisions of the NYLL.

viii.

Eighth Cause of Action: Recovery of equipment costs
under both statutes.

ix.

Ninth Cause of Action: Violation of the tip-withholding
provisions of the NYLL.

Violation of the overtime
Violation of the New York
Violation of the overtime

The first five of these causes of action are related: They all assert that
Defendants paid Plaintiffs insufficient wages, and the Court will thus consider
all five in tandem. The Court will address Plaintiffs’ four remaining causes of
action individually.

20

At the risk of belaboring the point, the Court has largely credited
Defendants’ case over Plaintiffs’. But Plaintiffs are still entitled to damages
under their First through Seventh Causes of Action. Plaintiffs established that
they were underpaid in violation of New York and federal law. And Koo
concedes that she violated New York’s recordkeeping and wage-statement
requirements. Plaintiff’s tools-of-the-trade claim (their Eighth Cause of Action)
and their tip-withholding claim (their Ninth) fail.
Below, the Court analyzes Plaintiffs’ causes of action, then separately
explains why Plaintiffs are entitled to recover prejudgment interest.
A.

Plaintiffs Are Entitled to Relief on Their First, Second, Third,
Fourth, and Fifth Causes of Action, Because Koo Paid Them Less
Than the FLSA and the NYLL Required
1.

Applicable Law

“The FLSA and the NYLL both ‘guarantee[ ] compensation for all
work ... engaged in by [covered] employees.” Salinas v. Starjem Rest. Corp., 123
F. Supp. 3d 442, 472 (S.D.N.Y. 2015) (quoting Kuebel v. Black & Decker Inc.,
643 F.3d 352, 359 (2d Cir. 2011)). 6 “To establish liability on a claim for

6

The parties agree that Koo is an “employer” within the meaning of the FLSA and the
NYLL. “In order to establish a violation of the FLSA, a plaintiff must first show that [he]
is a ‘covered employee,’ who was ‘employed in an enterprise engaged in interstate
commerce or in the production of goods for interstate commerce.’” Garcia-Devargas v.
Maino, No. 15 Civ. 2285 (JLC), 2017 WL 129123, at *4 (S.D.N.Y. Jan. 13, 2017) (citation
omitted). “Likewise, [t]o recover under the NYLL, [a plaintiff] must prove that he was an
‘employee’ and that [the defendants] were ‘employers’ as defined by the statute.” Id.
(internal quotation marks and citations omitted). The parties stipulated that “Koo was
an employer of Plaintiffs for purposes of the FLSA and the NYLL[.]” (JPTO, Joint
Stipulation of Fact 3).
However, during Plaintiffs’ final year of employment at Koodo Sushi — 2015 — the
restaurant was not “an enterprise engaged in interstate commerce” under the FLSA.
Garcia-Devargas, 2017 WL 129123, at *4 (citation omitted). To qualify as an enterprise
engaged in interstate commerce, a restaurant must, inter alia, have an “annual gross
volume of sales made or business done [that] is not less than $500,000.” 29 U.S.C.

21

underpayment of wages, ‘a plaintiff must prove that he performed work for
which he was not properly compensated, and that the employer had actual or
constructive knowledge of that work.’” Id. (quoting Kuebel, 643 F.3d at 361);
see Tapia v. Blch 3rd Ave. LLC, No. 14 Civ. 8529 (AJN), 2016 WL 4581341, at
*4 (S.D.N.Y. Sept. 1, 2016) (under the FLSA and the NYLL, “[p]laintiffs bear the
burden of proof to establish all claims and damages by a preponderance of the
evidence”) .
Where an employer’s payroll records are inaccurate or incomplete, courts
apply a burden-shifting scheme to determine whether an employee has
established that he was underpaid, and what damages he suffered. The metes
and bounds of these burdens are similar under both the FLSA and the NYLL:
FLSA: “When an employer fails to maintain accurate and complete
records of the hours employees work and the amounts they are paid, the
plaintiff-employee need only … submit ‘sufficient evidence from which
violations of the [FLSA] and the amount of an award may be reasonably
inferred.’” Gonzalez v. Masters Health Food Serv. Inc., No. 14 Civ. 7603 (VEC),
2017 WL 3835960, at *16 (S.D.N.Y. July 27, 2017) (quoting Reich v. S. New

§ 203(s)(1)(A)(ii). Koodo Sushi met this $500,000.00 threshold in 2013 and 2014, but
not 2015. (10/19/16 Stipulation). Plaintiffs recognize this: They argue that
“Defendants are … subject to the overtime wage requirements of the FLSA for the years
2013 and 2014.” (Pl. CL ¶¶ 10-11). But Defendants were not subject to the FLSA’s
wage-and-hour requirements in 2015.
The NYLL, unlike the FLSA, does not impose an enterprise-value requirement. GarciaDevargas, 2017 WL 129123, at *4. And as a result, Plaintiffs may recover damages for
Defendants’ 2015 violations of the NYLL. As the Court will explain infra, to some extent
this distinction is academic: Even though Defendants violated the FLSA in 2013 and
2014, the Court is awarding damages to Plaintiffs under the NYLL (and not the FLSA)
for all of the years at issue in this case.

22

England Telecomms. Corp., 121 F.3d 58, 66 (2d Cir. 1997)). An employee
discharges his burden at this first step “if he … can prove that [he] ‘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.’” Hernandez v. Jrpac Inc., No. 14 Civ. 4176
(PAE), 2016 WL 3248493, at *27 (S.D.N.Y. June 9, 2016) (quoting Anderson v.
Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946)). “This burden is ‘not high’
and may be met ‘through estimates based on [the employee’s] own
recollection.’” Id. (quoting Kuebel, 643 F.3d at 362).
If an employee makes this showing, “[t]he burden then shifts to the
employer to come forward [i] with evidence of the precise amount of work
performed or [ii] with evidence to negative the reasonableness of the inference
to be drawn from the employee’s evidence.” Jrpac, 2016 WL 3248493, at *27
(quoting Anderson, 328 U.S. at 687-88). “If the employer fails to produce such
evidence, the court may then award damages to the employee, even though the
result may be only approximate.” Gonzalez, 2017 WL 3835960, at *16 (quoting
Kuebel, 643 F.3d at 362).
NYLL: “A similar standard applies to unpaid compensation claims under
[the] NYLL.” Gonzalez, 2017 WL 3835960, at *16; see Garcia v. JonJon Deli
Grocery Corp., No. 13 Civ. 8835 (AT), 2015 WL 4940107, at *4 & n.8 (S.D.N.Y.
Aug. 11, 2015) (“Courts use the same burden-shifting framework to determine
liability for unpaid overtime under the NYLL [and the FLSA].”). But under the
NYLL, an employer who fails to keep accurate records shoulders a more
23

stringent burden of proof. “NYLL § 196-a provides that where an employer fails
to ‘keep adequate records or provide statements of wages to employees as
required’ by the statute, the employer ‘shall bear the burden of proving that the
complaining employee was paid wages, benefits and wage supplements.’”
Canelas v. World Pizza, Inc., No. 14 Civ. 7748 (ER), 2017 WL 1233998, at *9
(S.D.N.Y. Mar. 31, 2017) (quoting NYLL § 196-a(a)).
By its terms, the NYLL — unlike the FLSA — does not permit an
employer to discharge this burden by undermining the reasonableness of an
employee’s evidence that he was underpaid. Cf. Jrpac, 2016 WL 3248493, at
*27. The NYLL is more demanding: An employer must demonstrate that it in
fact paid its employees “wages, benefits, and supplements.” NYLL § 196-a(a).
And “[i]f an employer cannot satisfy its burden under the FLSA, it cannot
satisfy th[is] ‘more demanding burden’ of the NYLL.” Canelas, 2017 WL
1233998, at *9 (quoting Doo Nam Yang v. ACBL Corp., 427 F. Supp. 2d 327,
337 n.15 (S.D.N.Y. 2005)).
***
Although these two burden-shifting schemes impose similar
requirements, an employee “may not receive a ‘double recovery’ of back wages
under both the FLSA and [the] NYLL.” Jrpac, 2016 WL 3248493, at *31
(quoting Gen. Tel. Co. of the Nw. v. EEOC, 446 U.S. 318, 333 (1980)); accord
Hengjin Sun v. China 1221, Inc., No. 12 Civ. 7135 (RJS), 2016 WL 1587242, at
*2 (S.D.N.Y. Apr. 19, 2016) (“The law in this Circuit is clear: ‘Obviously,
plaintiffs are not entitled to recover twice’ under both the FLSA and NYLL ‘for
24

the same injury.’” (quoting Cao v. Wu Liang Ye Lexington Rest., Inc., No. 08 Civ.
3725 (DC), 2010 WL 4159391, at *2 n.2 (S.D.N.Y. Sept. 30, 2010))). If “‘a
plaintiff is entitled to damages under both federal and state wage law,’ the
Court has discretion to award [that plaintiff] damages under the statute
providing the greatest amount of relief.” China 1221, 2016 WL 1587242, at *2
(quoting Jiao v. Shi Ya Chen, No. 03 Civ. 165 (DF), 2007 WL 4944767, at *17
(S.D.N.Y. Mar. 30, 2007)); see Jrpac, 2016 WL 3248493, at *31 (awarding
plaintiffs damages under the NYLL, not the FLSA, because the NYLL’s “higher
minimum wage” and longer statute of limitations meant that “[p]laintiffs’
damages award under the NYLL necessarily … subsume[d] their award under
the FLSA”). 7
Against the backdrop of these FLSA and NYLL burden-shifting schemes,
the Court turns to the central legal question in this case: What is an employer
legally required to pay her employees? The answer involves several steps.
Below, the Court addresses (i) what constitutes minimum wage and overtime
under the FLSA and the NYLL, (ii) when meal breaks are not compensable

7

The FLSA and the NYLL have different statutes of limitations, but the difference is not
material in this case. The FLSA’s statute of limitations “is two years,” or three if an
employer willfully violated the statute. E.g., McLean v. Garage Mgmt. Corp., No. 09 Civ.
9325 (DLC), 2012 WL 1358739, at *7 (S.D.N.Y. Apr. 19, 2012); see 29 U.S.C. § 255(a).
The NYLL’s statute of limitations is six years. NYLL § 663(3). Plaintiffs filed the
Complaint on April 7, 2015. (Dkt. #1). Any NYLL violations Defendants committed on
or after April 7, 2009 (which was before Koo hired any of the Plaintiffs) are actionable.
The FLSA, in contrast, would at most reach back to April 7, 2012. Plaintiffs’ NYLL
damages are thus greater than their FLSA damages.
To be clear, Defendants violated the FLSA and the NYLL when they underpaid Plaintiffs.
Plaintiffs are entitled to relief for their First and Second Causes of Action (which seek
relief under the FLSA) as well as their Third, Fourth, and Fifth (which arise under the
NYLL). But as far as the quantum of damages is concerned, Plaintiffs will recover under
the NYLL alone.

25

under these two statutes; (iii) the NYLL’s spread-of-hours requirement; (iv) the
requirements an employer must fulfill to deduct a tip credit from her
employees’ wages; (v) the requirements an employer must fulfill to deduct a
meal credit from her employees’ wages; and (vi) when an employee is entitled to
recover liquidated damages under the FLSA and the NYLL.
a.

Minimum Wage and Overtime

At all times relevant to this lawsuit, the FLSA mandated that employees
receive a $7.25 per hour minimum wage. 29 U.S.C. § 206(a)(1)(C). Minimum
wage under the NYLL was also $7.25 until December 31, 2013, when it
increased to $8.00, and it increased again to $8.75 on December 31, 2014.
NYLL § 652(1).
Both the FLSA and the NYLL also require employers to pay overtime.
The requirement under both statutes is the same: Once an employee works 40
hours in a week, he must be paid “one and one-half times [his] regular rate” for
all excess hours. Dejesus v. HF Mgmt. Servs., LLC, 726 F.3d 85, 88 (2d Cir.
2013) (quoting 29 U.S.C. § 207(a)(1)) (FLSA); Salustio v. 106 Columbia Deli
Corp., — F. Supp. 3d —, No. 15 Civ. 6857 (GWG), 2017 WL 3736695, at *10
(S.D.N.Y. Aug. 30, 2017) (NYLL).
b.

Non-Compensable 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.’” Jrpac,
2016 WL 3248493, at *27 (quoting Hart v. Rick’s Cabaret Int’l, Inc., 60 F. Supp.
3d 447, 476 n.15 (S.D.N.Y. 2014)); see also Perkins v. Bronx Lebanon Hosp.
26

Ctr., No. 14 Civ. 1681 (JCF), 2016 WL 6462117, at *3 n.6 (S.D.N.Y. Oct. 31,
2016) (“The NYLL incorporate[s] [the] FLSA[’s] standards for determining
whether time worked is compensable time.” (internal quotation marks and
citation omitted)).
“To qualify as a bona fide meal period, ‘[t]he employee must be
completely relieved from duty for the purposes of eating regular meals.
Ordinarily 30 minutes or more is long enough for a bona fide meal period.’”
Salinas, 123 F. Supp. 3d at 472 (quoting 29 C.F.R. § 785.19(a)). Conversely,
an “employee is not relieved if he is required to perform any duties, whether
active or inactive, while eating.” 29 C.F.R. § 785.19(a). Moreover, “[r]est
periods of short duration, running from 5 minutes to about 20 minutes … are
customarily paid for as working time.” Id. § 785.18.
c.

The NYLL’s Spread-of-Hours Requirement

Under New York law, an employee’s “spread of hours is the length of the
interval between the beginning and end of an employee’s workday.” N.Y. Comp.
Codes R. & Regs. tit. 12 (“12 N.Y.C.R.R.”), § 146-1.6. The “NYLL requires
employers to pay an employee who works a spread of hours in excess of ten an
additional hour at the minimum wage rate.” Pineda v. Tokana Cafe Bar
Restorant Inc., No. 16 Civ. 1155 (JPO), 2017 WL 1194242, at *3 (S.D.N.Y.
Mar. 30, 2017).
“Before January 1, 2011,” New York employers were required to pay
“spread-of-hours wages only [to] employees who were paid at the minimum
wage.” Villar v. Prana Hosp., Inc., No. 14 Civ. 821 (JCF), 2017 WL 1333582, at
27

*4 (S.D.N.Y. Apr. 11, 2017). But “[e]ffective January 1, 2011, employers are
required to pay spread-of-hours wages for ‘all employees in restaurants and allyear hotels, regardless of a given employee’s regular rate of pay.’” Id. (quoting
12 N.Y.C.R.R. § 146-1.6(d)).
d.

Tip Credit

“Both the FLSA and the NYLL permit an employer to pay a tipped worker
a cash wage that is lower than the statutory minimum wage, provided that the
cash wage and the employee’s tips, taken together, are at least equivalent to
the minimum wage.” Inclan v. N.Y. Hosp. Grp., Inc., 95 F. Supp. 3d 490, 497
(S.D.N.Y. 2015). “This allowance against the minimum cash wage is known as
a ‘tip credit.’” Id.
The requirements an employer must fulfill to claim a tip credit differ
slightly under the FLSA and the NYLL. The Court considers each statute in
turn:
FLSA: “The FLSA’s definition of ‘wage’ provides that, under certain
circumstances, employers of ‘tipped employees’ may apply part of such
employees’ tips towards that minimum wage.” Trinidad v. Pret A Manger (USA)
Ltd., 962 F. Supp. 2d 545, 560 (S.D.N.Y. 2013) (quoting 29 U.S.C. § 203(m)).
The FLSA defines a “[t]ipped 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). “When deciding whether an employee
customarily and regularly receives tips, courts must determine whether the
employee’s job is historically a tipped occupation and whether he has more
28

than ‘de minimis’ interaction with customers as a part of his employment.”
Salinas, 123 F. Supp. 3d at 467 (quoting Chhab v. Darden Rests., Inc., No. 11
Civ. 8345 (NRB), 2013 WL 5308004, at *6 (S.D.N.Y. Sept. 20, 2013)). And
when “an employee performs both tipped and untipped work, the question of
whether an employer is entitled to apply a tip credit for minimum wage
purposes turns on whether the employee spends more than twenty percent of
his or her workweek performing non-tipped work. If so, the employer is not
entitled to apply a tip credit, and must pay that employee the full minimum
wage.” Islam v. BYO Co. (USA), No. 16 Civ. 927 (PGG), 2017 WL 2693717, at *4
(S.D.N.Y. June 20, 2017).
To avail himself of the FLSA’s tip credit, an employer must comply with
two additional statutory requirements. “The FLSA provides that the tip credit
‘shall not apply with respect to any tipped employee unless [i] such employee
has been informed by the employer of the [statute’s tip credit] provisions, and
[ii] all tips received by such employee have been retained by the employee.’”
Jrpac, 2016 WL 3248493, at *23 (quoting 29 U.S.C. § 203(m)). This first
requirement — the “notice provision” — “is strictly construed and normally
requires that an employer take affirmative steps to inform affected employees of
the employer’s intent to claim the tip credit.” Inclan, 95 F. Supp. 3d at 497
(quoting Perez v. Lorraine Enters., Inc., 769 F.3d 23, 27 (1st Cir. 2014)).
“The employer bears the burden of showing that it satisfied the notice
requirement ‘by, for example, providing employees with a copy of § 203(m) and
informing them that their tips will be used as a credit against the minimum
29

wage as permitted by law.’” Cucu v. 861 Rest. Inc., No. 14 Civ. 1235 (JGK),
2017 WL 2389694, at *3 (S.D.N.Y. June 1, 2017) (quoting Copantitla v.
Fiskardo Estiatorio, Inc., 788 F. Supp. 2d 253, 288 (S.D.N.Y. 2011)). However,
“[t]he FLSA’s notice provision does not require that the notice be given in
writing.” Jrpac, 2016 WL 3248493, at *23. “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 (citation omitted); see
Copantitla, 788 F. Supp. 2d at 288 (restaurant not entitled to take tip credit
despite “informing employees that they would receive an hourly rate plus tips”
and “posting notices about the minimum wage laws,” because restaurant did
not “t[ell] its employees that it intended to use tips to satisfy its minimum wage
obligations”).
NYLL: “The NYLL allows an employer to take a tip credit for tipped
employees, subject to certain conditions similar to those under the FLSA.”
Jrpac, 2016 WL 3248493, at *25; see 12 N.Y.C.R.R. § 146-1.3 (“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[.]”). But there is a critical distinction between the
NYLL’s notice provision and the FLSA’s: “Notice of the tip credit under the
NYLL … must be written.” Jrpac, 2016 WL 3248493, at *25. Thus, “[p]rior to
the start of employment, an employer shall give each employee written notice
of … the amount of tip credit, if any, to be taken from the basic minimum
30

hourly rate … The notice shall also state that extra pay is required if tips are
insufficient to bring the employee up to the basic minimum hourly rate.” 12
N.Y.C.R.R. § 146-2.2(a). And this notice must be written in both English and
“any other language spoken by the new employee as his/her primary
language.” Id. § 146-2.2(a)(1)-(2). Moreover, once an employer has provided
written notice of this tip credit, the employer must obtain “acknowledgement of
receipt signed by the employee,” and that signed acknowledgement must “be
kept on file for six years.” Id. § 146-2.2(c).
“The burden is on the [employer] to show that [it has] complied with the
[NYLL’s] tip notice requirement.” Salustio, 2017 WL 3736695, at *10 (quoting
Valle v. Gordon Chen’s Kitchen LLC, — F. Supp. 3d —, No. 15 Civ. 2005 (GWG),
2017 WL 2438571, at *6 (S.D.N.Y. June 6, 2017)). “An employer who fails to
provide the required notice is liable for the difference between the full minimum
wage rate and what the employee was actually paid.” Id.
e.

Meal Credit

The FLSA and the NYLL also allow employers to deduct the cost of
certain meals from their employees’ wages. Here too, the requirements under
each statute differ, so the Court will consider them separately:
FLSA: “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.” Jrpac,
2016 WL 3248493, at *26 (quoting 29 U.S.C. § 203(m)). “However, the meal
credit’s ‘reasonable cost’ may ‘not [be] more than the actual cost,’ … and ‘the
31

employer must retain records documenting the out-of-pocket costs that it
incurred[.]’” Id. (quoting 29 C.F.R. § 531.3(a); Ke v. Saigon Grill, Inc., 595 F.
Supp. 2d 240, 256-57 (S.D.N.Y. 2008)). “The employer ‘bears the burden of
proving both the actual costs [of the meal] and their reasonableness.’” Id.
(quoting Saigon Grill, 595 F. Supp. 2d at 257).
NYLL: In New York, “[m]eals … 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.” Jrpac, 2016 WL 3248493, at *26 (quoting
12 N.Y.C.R.R. § 146-1.9). And such a meal must consist of “adequate portions
of a variety of wholesome, nutritious foods and … include at least one of the
types of food from all four of the following groups: [i] fruits or vegetables;
[ii] grains or potatoes; [iii] eggs, meat, fish, poultry, dairy, or legumes; and
[iv] tea, coffee, milk or juice.” 12 N.Y.C.R.R. § 146-3.7. If an employer cannot
prove that the meals it provided its employees satisfied these nutritional
requirements, it cannot claim a meal credit. See Romero v. Anjdev Enterps.,
Inc., No. 14 Civ. 457 (AT), 2017 WL 548216, at *10 (S.D.N.Y. Feb. 10, 2017);
see also Jrpac, 2016 WL 3248493, at *27 (noting that 12 N.Y.C.R.R. § 146-3.7’s
“definition of meal … contains mandatory language”).
f.

Liquidated Damages

Finally, the Court considers when an employee may obtain liquidated
damages under the FLSA and the NYLL:
FLSA: “‘Under the FLSA, a district court is generally required to award a
plaintiff liquidated damages equal in amount to actual damages’ for violations
32

of the FLSA’s minimum wage and overtime provisions.” Inclan, 95 F. Supp. 3d
at 504 (quoting Barfield v. N.Y.C. Health & Hosps. Corp., 537 F.3d 132, 150 (2d
Cir. 2008)). The statute provides that an employer who commits
wage-and-hour violations “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).
Courts have “discretion to deny liquidated damages where [an] employer
shows that, despite its failure to pay appropriate wages, it acted in subjective
‘good faith’ with objectively ‘reasonable grounds’ for believing that its acts or
omissions did not violate the FLSA.” Barfield, 537 F.3d at 150 (quoting 29
U.S.C. § 260). But this is a tough row to hoe. “To establish the requisite
subjective ‘good faith,’ an employer must show that it took active steps to
ascertain the dictates of the FLSA and then act to comply with them.” Jrpac,
2016 WL 3248493, at *33 (quoting Hart v. Rick’s Cabaret Int’l, Inc., 967 F.
Supp. 2d 901, 938 (S.D.N.Y. 2013)). And an employer will not escape paying
liquidated damages under the FLSA unless he establishes that he acted in good
faith and in an objectively reasonable way “by plain and substantial evidence.”
Id. (internal quotation marks omitted) (quoting Moon v. Kwon, 248 F. Supp. 2d
201, 234 (S.D.N.Y. 2002)).
NYLL: The NYLL’s liquidated damages provision changed in two ways
during the time period when Plaintiffs worked at Koodo Sushi. The first
change, which took effect on November 24, 2009, altered the burden of proof
33

and mental-state requirement of this provision. See China 1221, 2016 WL
1587242, at *3. The second, “effective April 9, 2011,” increased the liquidated
damages an NYLL plaintiff can recover from 25% of his unpaid wages to 100%.
Id. Neither amendment applies retroactively. See McLean v. Garage Mgmt.
Corp., No. 09 Civ. 9325 (DLC), 2012 WL 1358739, at *9-10 (S.D.N.Y. Apr. 19,
2012). The Court considers each amendment in turn.
November 24, 2009: Before November 24, 2009, an employee could
recover 25% “liquidated damages under the NYLL only if that employee could
prove that the employer’s failure to pay the wage required by [[A]rticle 6 of the
NYLL] was willful.” Inclan, 95 F. Supp. 3d at 504 (internal quotation marks
and citation omitted). The NYLL’s definition of willfulness mirrored the FLSA’s:
An employer “willfully violate[d] the [NYLL] [if] it either knew or showed reckless
disregard for … whether its conduct was prohibited by the” NYLL. Kuebel, 643
F.3d at 366 (internal quotation marks and citation omitted) (providing this
definition of willfulness in discussing the FLSA, and noting that court below
“reasonably concluded … that the NYLL’s willfulness standard does not
appreciably differ” (internal quotation marks and citation omitted)); see Inclan,
95 F. Supp. 3d at 504-05.
But on November 24, 2009, the NYLL was amended to reverse and
augment the burden. See, e.g., Galeana v. Lemongrass on Broadway Corp.,
120 F. Supp. 3d 306, 317 (S.D.N.Y. 2014). From that date forward, “the
NYLL … removed the requirement of willfulness, so as … to provide, like the
FLSA, than an employee is entitled to liquidated damages except where the
34

employer demonstrates its good faith.” Jrpac, 2016 WL 3248493, at *34
(emphasis added); see NYLL § 663(1). “[C]ourts have not substantively
distinguished the [FLSA’s] standard from the current [NYLL] standard of good
faith.” Inclan, 95 F. Supp. 3d at 505.
April 9, 2011: “Prior to April 9, 2011, … liquidated damages under the
NYLL were calculated at [25%] of the lost pay.” Begum v. Ariba Disc., Inc.,
No. 12 Civ. 6620 (DLC), 2015 WL 223780, at *2 (S.D.N.Y. Jan. 16, 2015). An
April 9, 2011 amendment to the NYLL “authorized liquidated damages
amounting to 100% of the total unpaid wages for violations” occurring after
that date. China 1221, 2016 WL 1587242, at *3.
Because of the November 24, 2009 and April 9, 2011 amendments to the
NYLL, its liquidated-damages provision is very similar to the FLSA’s. But a
plaintiff cannot simultaneously recover liquidated damages under both
statutes. Chowdhury v. Hamza Express Food Corp., 666 F. App’x 59, 60-61 (2d
Cir. 2016) (summary order). A number of judges in this District have held
otherwise. See, e.g., Tapia, 2016 WL 4581341, at *7 (noting intra-District
disagreement but, “[w]ithout opining on the appropriate rule for earlier time
periods,” concluding that a plaintiff cannot recover double liquidated damages
“for periods after April 9, 2011”). 8 But that approach does not hold water in
light of the 2009 and 2011 amendments to the NYLL. See Inclan, 95 F. Supp.

8

This Court also need not opine on whether courts can stack liquidated damages for
overlapping NYLL and FLSA violations that predate April 9, 2011. At most, the FLSA’s
statute of limitations stretches back three years. 29 U.S.C. § 255(a). Plaintiffs filed the
Complaint on April 7, 2015. (Dkt. #1). They cannot recover any damages under the
FLSA — let alone liquidated damages — for Defendants’ pre-April 9, 2012 conduct.

35

3d at 504-06. As things stand after those amendments, both statutes call for
100% liquidated damages when an employer fails to show good-faith
compliance with wage-and-hour laws. Id. at 505-06. In turn, awarding
stacked liquidated damages under the FLSA and the NYLL “would amount to
an impermissible double recovery.” Jrpac, 2016 WL 3248493, at *35.
2.

Analysis

That lengthy account of FLSA and NYLL principles should make plain
that this Court must consider many factors to determine whether Defendants
underpaid Plaintiffs. The Court concludes that Defendants did — but to a far
lesser degree than Plaintiffs claim. To explain this conclusion, the Court will
begin by addressing several issues common to all Plaintiffs, then calculate the
damages that each Plaintiff sustained.
The Court begins with the burden-shifting scheme common to FLSA and
NYLL claims. When an employer fails to maintain accurate records, a plaintiff
must proffer “sufficient evidence from which violations of the [FLSA and the
NYLL] and the amount of an award may be reasonably inferred.” Gonzalez,
2017 WL 3835960, at *16 (internal quotation marks and citation omitted);
Garcia, 2015 WL 4940107, at *4 & n.8. Such is the case here. Defendants did
not maintain accurate records of Plaintiffs’ hours and wages. Tellingly,
Defendants’ argument in their post-trial brief centers on this burden-shifting
scheme, which only comes into play when an employer’s records are deficient.
(See Def. Br. 22). And Plaintiffs proffered sufficient evidence from which the
Court could infer violations of the FLSA and the NYLL. All three testified that
36

they were systematically underpaid for the hours they worked at Koodo Sushi.
The Court — conscious of the fact that an employee’s burden at this first stage
“is ‘not high,’” Jrpac, 2016 WL 3248493, at *27 (quoting Kuebel, 643 F.3d at
362) — concludes that Plaintiffs made an initial showing that Defendants
violated the FLSA and the NYLL.
That shifted the burden to Defendants. The FLSA required Defendants
“to come forward [i] with evidence of the precise amount of work performed or
[ii] with evidence to negative the reasonableness of the inference to be drawn
from the employee’s evidence.” Jrpac, 2016 WL 3248493, at *27 (quoting
Anderson, 328 U.S. at 687-88). The NYLL, in contrast, placed on Defendants
“the burden of proving that [Plaintiffs were] paid wages, benefits and wage
supplements.” NYLL § 196-a.
Defendants satisfied these burdens — in part. Through their payroll
records and Koo’s testimony, Defendants established that Plaintiffs inflated
their hours and underestimated their pay. There are detailed records (most
importantly, the Aldelo Pay Out Details Report and Koo’s calendar) that show
the wages Plaintiffs received, and those records span nearly all of the years
Plaintiffs worked at Koodo Sushi. Those records show that Plaintiffs were paid
by the hour, not the week. And in the main, those records demonstrate that
Koo paid Plaintiffs wages that satisfied the FLSA and the NYLL.
To be sure, crediting Defendants’ records requires the Court to make
more than one inferential leap. The Aldelo Pay Out Details Report shows how
much Koo paid Plaintiffs, but not how many hours they worked. Likewise, the
37

calendar shows what Koo paid Sanchez and Mastranzo, but provides few
details about their hours. These payment amounts, however, are remarkably
consistent with Koo’s recollections of Plaintiffs’ work schedules and the salaries
she agreed to pay them. Conversely, the payment amounts are remarkably
inconsistent with Plaintiffs’ recollections of their wages and hours.
Why, then, are Plaintiffs entitled to recover any damages? There are
three reasons. First, Defendants’ records are incomplete. Again, there is no
single document that demonstrates the wages Plaintiffs earned and the hours
they worked. Defendants’ records make clear that for many weeks, spanning
many years, Plaintiffs earned more than minimum wage under the FLSA and
the NYLL. But the Court cannot make that determination for every week
Plaintiffs worked at Koodo Sushi, in part because Defendants’ records are
incomplete. And the Court will construe any gaps in those records against
Defendants.
Second, Defendants were not entitled to take tip credits from Plaintiffs’
wages under the FLSA or the NYLL. Defendants did not comply with either
statute’s notice requirement. The FLSA required Defendants to notify Plaintiffs
of § 203(m)’s tip-credit provision, and the Court must “strictly construe[ ]” this
requirement against Defendants. Inclan, 95 F. Supp. 3d at 497 (citation
omitted). At most, Koo told Plaintiffs that she would be deducting a set “tip
credit” from their hourly wages. Koo did not testify (and the Court does not
believe) that she communicated to Plaintiffs that any tips they received would
“be[ ] credited against their wages” in order to achieve minimum wage. Id.
38

(citation omitted). And Koo plainly did not comply with the NYLL’s tip-credit
provision, which required Koo (i) to give Plaintiffs “written notice of the” tip
credit in English and Spanish, and (ii) to obtain a signed acknowledgement
from each Plaintiff and retain it “for six years.” 12 N.Y.C.R.R. § 146-2.2(a), (c)
(emphasis added).
Third, Defendants were not allowed to deduct meal credits from Plaintiffs’
wages under the FLSA or the NYLL. The FLSA required Koo to maintain
records cataloguing the costs of the meals she provided to Plaintiffs. Jrpac,
2016 WL 3248493, at *26. Koo did not do so. And the NYLL required Koo to
adhere to set nutritional guidelines for the food she served Plaintiffs.
12 N.Y.C.R.R. § 146-3.7. Here too, there is no evidence that Koo complied.
The upshot of these three deficiencies in Defendants’ case is that
Defendants have largely, but not fully, discharged their burdens under the
FLSA and the NYLL. There were many weeks when Defendants paid Plaintiffs
less than minimum wage (and corresponding overtime) under the FLSA and the
NYLL, given that Defendants could not deduct meal or tip credits from
Plaintiffs’ wages. And for many weeks, the Court cannot determine what (or if)
Defendants paid Plaintiffs because of the gaps in Defendants’ records.
For these reasons, the Court must “award damages to [Plaintiffs], even
though the result may be only approximate.” Gonzalez, 2017 WL 3835960, at
*16 (internal quotation mark and citation omitted). Because Plaintiffs are
entitled to greater damages under the FLSA than the NYLL, the Court will
award them damages under the state statute. China 1221, 2016 WL 1587242,
39

at *2 (citation omitted). The Court begins with Sanchez, turns to Mastranzo,
and concludes with Gamero. 9
a.

Sanchez

Sanchez is entitled to recover $2,311.58 in unpaid wages (i.e., in actual
damages), plus $972.43 in liquidated damages. The Court considers each
category of damages in turn:
Actual Damages: To reach this figure, the Court began by considering
the minimum legal payments Sanchez was due under the NYLL, as set forth in
Defendants’ Findings of Fact and Conclusions of Law. (Def. FFCL ¶¶ 260, 263,
265). Defendants’ arithmetic checked out: These figures accounted for the
hours Sanchez worked throughout his tenure at Koodo Sushi (based on his
usual schedule of 50 hours per week), and took account of prevailing NYLL
minimum-wage rates. Defendants also correctly assumed that Sanchez worked
overtime, and took non-compensable lunch and dinner breaks. Defendants
calculated that Sanchez was owed: (i) $340.49 per week during his first month
at Koodo Sushi; (ii) $347.69 per week from his second month on the job
through December 31, 2013; and (iii) $383.75 per week from January 1, 2014,
through the end of 2014. (Id.). 10

9

To be clear: Plaintiffs all proved the Complaint’s First and Third Causes of Action,
which arise under the FLSA’s minimum-wage requirement and the NYLL’s, respectively.
Sanchez and Mastranzo prevail under the Complaint’s Second and Fourth Causes of
Action (for overtime violations) and its Fifth Cause of Action (for Defendants’
spread-of-hours violations). Gamero never worked overtime, and never worked more
than 10 hours in one day.

10

Defendants did not calculate Sanchez’s 2015 damages. But at trial, Sanchez conceded
(perhaps unwittingly) that he is not entitled to damages for the work he performed in
January 2015 and February 2015. Sanchez testified that he worked a “half time”
schedule after December 2014, and continued to work half-time through the end of his

40

But Defendants’ calculations assumed that Koo was entitled to deduct
meal and tip credits from Sanchez’s wages. (Def. FFCL ¶¶ 260, 263, 265). She
was not. And once the Court removed those credits from Defendants’
calculations, it determined that the actual minimum payments Koo owed
Sanchez were: (i) $375.19 per week during his first month at Koodo Sushi;
(ii) $375.19 per week from his second month through December 31, 2013; and
(iii) $414.00 per week from January 1, 2014, through the end of 2014. 11
Where Defendants’ records established that Sanchez worked less than his
standard 50 hours in a week, the Court recalculated what Sanchez was due
based on this more limited schedule.
The Court then compared these minimum payments to the actual
payments Sanchez received throughout his tenure at Koodo Sushi. Here, too,
the Court built off of Defendants’ assiduous spade work. Appendix A to
Defendants’ Findings of Fact and Conclusions of Law is a spreadsheet of
Sanchez’s and Mastranzo’s wage payments. (Def. FFCL, app. A). The Court
reviewed every entry, cross-checking each one against Defendants’
records (mostly, Koo’s calendar and the Aldelo Pay Out Details Report). When
employment at Koodo Sushi. (Tr. 29). During this period, Sanchez claimed that he
worked from 11:00 a.m. to 3:00 p.m., “Monday through Friday” — a total of 20 hours
per week. (Id. at 25, 40). Sanchez further claimed that Defendants paid him $300.00
per week during this period. (Id. at 29). Even assuming Sanchez was owed $8.75 per
hour (New York’s 2015 minimum wage), and even assuming that he took no meal
breaks, Defendants owed Sanchez $175.00 per week — less than what Sanchez claims
Defendants actually paid him.
11

In calculating the minimum weekly payment Sanchez was owed throughout 2014,
Defendants assumed that he worked 50 hours per week. (Def. FFCL ¶ 265). The Court
made the same assumption when it calculated what Sanchez was actually due in
2014 — even though Sanchez, by his own account, was working “half time” in
December 2014. (Tr. 25, 27).

41

those records were ambiguous — for example, when Koo’s handwriting was
illegible — the Court construed those ambiguities against Defendants and
assumed that Defendants paid Sanchez what he claimed he earned:
(i) $350.00 per week between the start of his employment until August 2011
(Tr. 27); (ii) $375.00 per week between August 2011 through the end of 2011
(id. at 27-28); and (iii) $500.00 per week throughout 2012 and 2014 (id. at 28).
In the vast majority of weeks, Defendants paid Sanchez more than the
minimum he was owed under the NYLL. But in some weeks, Defendants paid
him less. The Court aggregated the damages Sanchez sustained for all the
weeks in which Defendants paid him less than minimum wage. Pursuant to
these calculations, the Court determined that Defendants underpaid Sanchez
by $2,311.58.
Liquidated Damages: The Court also concludes that Sanchez is entitled
to liquidated damages under the NYLL. Sanchez’s tenure at Koodo Sushi
spanned both the November 24, 2009 and April 9, 2011 amendments to the
NYLL. And in turn, to determine what liquidated damages Sanchez can
recover, the Court must consider whether Defendants acted willfully and/or
demonstrated good faith, and must also calculate Sanchez’s liquidated
damages based on both the 25% (pre-April 9, 2011) and 100% (April 9, 2011,
and thereafter) rates.
The Court begins with the mental-state question prompted by the
November 24, 2009 amendment to the NYLL. Prior to that date, an employee
could recover liquidated damages for unpaid wages “only if th[at] employee
42

could prove that the employer’s failure to pay the wage required by [[A]rticle 6
of the NYLL] was willful.” Inclan, 95 F. Supp. 3d at 504 (internal quotation
marks and citation omitted). But beginning on November 24, 2009, the NYLL
required employers to demonstrate that they acted in good faith in order to
avoid paying liquidated damages. Jrpac, 2016 WL 3248493, at *34.
Under either standard, Sanchez prevails. The New York Department of
Labor investigated Koodo Sushi for overtime and spread-of-hours violations in
2008, one year before Koo hired Sanchez. But in spite of this investigation,
Koo continued to maintain haphazard and incomplete records. She deducted
meal and tip credits from Sanchez’s wages without complying with the NYLL’s
requirements for taking such credits. And, critically, she did not maintain —
and to date, has not instituted — a method to track accurately her employees’
hours. Those were willful violations of the NYLL: Koo “either knew or showed
reckless disregard for the” fact that she was violating the statute. Kuebel, 643
F.3d at 366 (citation omitted). (See also Pl. CL ¶¶ 67-74).
And Koo cannot show good faith. Koo testified that she makes annual
efforts to research labor laws. But her efforts fell far short of compliance — the
evidence at trial made plain that Koo did not “act to comply” with the NYLL.
Jrpac, 2016 WL 3248493, at *33 (citation omitted). Sanchez can thus recover
liquidated damages for unpaid wages throughout the entirety of his tenure at
Koodo Sushi, both before and after November 24, 2009. And this conclusion
applies with equal force to Mastranzo and Gamero: They too may recover
liquidated damages under the NYLL.
43

In light of the April 9, 2011 amendment to the NYLL, the Court
calculated Sanchez’s liquidated damages as follows. Using the calculations the
Court explained supra, it determined that before April 9, 2011, Defendants
underpaid Sanchez by $1,785.53. He can recover 25% of that figure —
$446.38 — in liquidated damages. Defendants underpaid Sanchez by $526.05
between April 9, 2011, and the end of his employment at Koodo Sushi; he can
recover exactly that amount in liquidated damages, too. Sanchez’s total
liquidated damages are $972.43.
b.

Mastranzo

The Court followed a nearly identical process to calculate Mastranzo’s
damages, although this math proved easier. Defendants underpaid Mastranzo
by $3,668.07, and Mastranzo may recover $2,915.04 in liquidated damages.
Actual Damages: Defendants argued that Mastranzo’s minimum salary
was: (i) $340.49 per week from the time he started at Koodo Sushi until
December 31, 2013, and (ii) $373.43 per week between January 1, 2014, and
December 31, 2014. (Def. FFCL ¶¶ 252, 255). After recalculating these wages
to remove tip and meal credits, the Court concluded that Mastranzo was
actually owed (i) $375.19 per week from the time he started at Koodo Sushi
until December 31, 2013, and (ii) $414.00 per week between January 1, 2014,
and December 31, 2014. The Court then compared these figures to the actual
wages Mastranzo received. And here as well, when Defendants’ records proved
ambiguous, the Court assumed that Mastranzo was paid the wages he alleged
Defendants paid him: (i) $350.00 per week from the start of his employment
44

(which Mastranzo claimed was June 2010) until June 2011 (Tr. 72, 74-75); and
(ii) $400.00 per week between June 2011 and the end of his tenure at the
restaurant (id. at 83-85).
Defendants did not offer a method for the Court to assess what
Defendants owed Mastranzo in 2015. As far as the Court can determine, there
are no records of Mastranzo’s wages from that year. Thus, the Court assumed
that Defendants paid Mastranzo $400.00 per week (as he claimed), and that he
was owed a minimum of $452.81, a rate that accounted for New York’s $8.75
minimum wage. In total, the Court calculated that Defendants underpaid
Mastranzo by $3,668.07.
Liquidated Damages: Before April 9, 2011, Defendants underpaid
Mastranzo by $1,004.04, which means he can recover $251.01 (25% of his
unpaid wages) in liquidated damages. Thereafter, Defendants underpaid
Mastranzo by $2,664.03, for which he can recover equivalent liquidated
damages. Mastranzo’s total liquidated damages are $2,915.04.
c.

Gamero

The Court followed a different method to calculate Gamero’s damages.
Gamero was, by a wide margin, the least credible trial witness. His account of
the hours he worked and the wages Defendants paid him was riddled with
obvious errors. Defendants thoroughly impeached Gamero — so thoroughly, in
fact, that the Court was hard-pressed to conclude that Gamero had discharged
his initial burden of demonstrating “the amount and extent of [his

45

undercompensated] work as a matter of just and reasonable inference.” Mt.
Clemens, 328 U.S. at 687.
But the strongest support for Gamero’s argument is found in the
evidence Defendants used to impeach Gamero. Defendants maintained at trial,
and persisted to maintain in their post-trial papers, that Koo paid Gamero
$5.00 per hour. (Def. FFCL ¶¶ 87-89). That rate, Defendants contend, was
more than Koo owed Gamero for his work as a delivery worker, once tip and
meal credits were deducted from his pay. (Id. at ¶ 87). The problem is that
Koo did not fulfill the NYLL’s requirements for deducting tip and meal credits
from Gamero’s wages. And it is of no moment that Gamero often earned more
than minimum wage once his tips were factored into his pay: “An employer
who” does not comply with the NYLL’s requirements for taking a tip credit “is
liable for the difference between the full minimum wage rate and what the
employee was actually paid.” Salustio, 2017 WL 3736695, at *10.
Complicating matters, there are few records that show what Defendants
paid Gamero and how much Gamero worked. The Aldelo Pay Out Details
Report is of limited use. It confirms that Gamero began working for Koodo
Sushi in late 2012, but it gives no indication of how many hours Gamero
worked. Gamero does not appear in Koo’s calendar. And although many of the
Seamless delivery reports show the hours Gamero worked and the hourly
wages Defendants paid him, those reports are few in number, and more than a
few are illegible.

46

What the Court is left with, then, is a plaintiff who effectively perjured
himself and defendants who concede that they underpaid him. Defendants
paid Gamero less than the NYLL’s minimum wage; he is entitled to recover
damages. But the question remains: how much?
The Court answered that question as follows. It first reviewed the
Seamless delivery reports that clearly showed the hours Gamero worked in a
given week. On average, Gamero worked approximately 13 hours during those
weeks. The Court assumed that Gamero took no meal breaks. All of these
Seamless delivery reports confirmed that Koo paid Gamero $5.00 per hour.
Extrapolating from these records, the Court inferred that on average, Koo paid
Gamero $65.00 per week in hourly wages. Under the NYLL, Koo was required
to pay Gamero a minimum of (i) $94.25 per week between November 2012 and
December 31, 2013; (ii) $104.00 per week from January 1, 2014, through
December 31, 2014; and (iii) $113.75 per week from January 1, 2015, through
the end of April 2015.
The Court then aggregated Gamero’s per-week damages (the difference
between $65.00 and what his weekly pay should have been) from the start of
his employment (late November 2012) through the end (April 2015). And from
that total, the Court eliminated one year of damages, because Gamero did not
work at Koodo Sushi for a whole year. These calculations yielded damages of
$2,535.00 for Gamero.
Because Gamero joined Koodo Sushi after April 9, 2011, he may recover
an equivalent measure of liquidated damages: $2,535.00.
47

B.

Gamero, But Not Mastranzo or Sanchez, Is Entitled to Recover
Damages for Plaintiffs’ Sixth Cause of Action, Because Koo Did Not
Provide Him with a Wage Notice
1.

Applicable Law

“New York Labor Law section 195(1) requires employers to provide
employees with wage notices within ten business days of the start of
employment.’” Kone v. Joy Constr. Corp., No. 15 Civ. 1328 (LTS), 2016 WL
866349, at *5 (S.D.N.Y. Mar. 3, 2016) (internal quotation marks and citation
omitted). Section 195(1) mandates that “[e]very employer shall … provide his
or her employees, in writing in English and in the language identified by each
employee as the primary language of such employee, at the time of hiring, a
notice containing” several categories of information, including “the regular pay
day designated by the employer” and “the physical address of the employer’s
main office.” NYLL § 195(1)(a). At all times relevant to this case, “[a]n
employee who d[id] not receive a wage notice within 10 business days of his
first day of employment [was] entitled to recover $50 for each week of work that
the violations occurred, up to a maximum of $2,500.” Jrpac, 2016 WL
3248493, at *29. 12
12

“By an amendment to the WTPA effective February 27, 2015, employees became entitled
to recover wage-notice statutory damages of $50 dollars ‘for each work day that the
violations occurred or continue to occur,’ not to exceed $5,000.” Cabrera v. 1560 Chirp
Corp., No. 15 Civ. 8194 (TPG) (DF), 2017 WL 1289349, at *7 (S.D.N.Y. Mar. 6, 2017)
(citation omitted), report and recommendation adopted, No. 15 Civ. 8194 (TPG) 2017 WL
1314123 (S.D.N.Y. Apr. 6, 2017). Gamero claims that he worked at Koodo Sushi “until
March 2015.” (Pl. FF ¶ 8). But he requests only $2,500.00 for Defendants’ violation of
Section 195(1), “overlooking the fact that the available penalties for … wage-notice
violations” increased during his employment at Koodo Sushi. Cabrera, 2017 WL
1289349, at *13. The Court therefore understands that Gamero is not seeking damages
for Defendants’ post-February 27, 2015 violation of Section 195(1). Cf. id. (awarding
plaintiffs more damages than they requested under Section 195(1) in light of
February 27, 2015 amendment).

48

Violations of Section 195(1) did not always result in money damages. It
was not until April 9, 2011, when New York’s Wage Theft Prevention Act
(“WTPA”) took effect, that employers were subject to damages for not providing
wage notices. See Kim v. Kum Gang, Inc., No. 12 Civ. 6344 (MHD), 2015 WL
2222438, at *30-31 (S.D.N.Y. Mar. 19, 2015). As many judges in this District
have held, the WTPA does not apply retroactively. See id. at *31 (collecting
cases). Thus, “an employee who began working before the WTPA took effect on
April 9, 2011, may not bring a claim for an employer’s failure to provide wage
notices.” Canelas v. A’Mangiare Inc., No. 13 Civ. 3630 (VB), 2015 WL 2330476,
at *5 (S.D.N.Y. May 14, 2015); accord Cucu, 2017 WL 2389694, at *6 (“For
plaintiffs hired before the WTPA took effect on April 9, 2011, the failure to
provide a wage notice is insufficient to support a WTPA claim because the
Second Circuit Court of Appeals has held that the WTPA does not apply
retroactively.” (citing Gold v. N.Y. Life Ins. Co., 730 F.3d 137, 143-44 (2d Cir.
2013))). 13

13

Before February 27, 2015, Section 195(1) imposed an additional wage-statement
requirement, although it does not affect Plaintiffs’ damages. “[B]eginning April 9, 2011,
the WTPA required employers to provide written wage notices [i] at the time of hiring,
and [ii] on or before February first of each subsequent year of the employee’s
employment with the employer.” Cabrera, 2017 WL 1289349, at *6 (emphasis added)
(internal quotation marks and citation omitted). This annual wage-notice requirement
was removed from Section 195(1) “effective February 27, 2015.” Id.; accord Kum Gang,
2015 WL 2222438, at *30.
Some courts, although recognizing “that the WTPA does not apply retroactively,” have
nonetheless awarded damages under Section 195(1) to plaintiffs hired before April 9,
2011, because these plaintiffs did not receive annual wage notices on or after
February 1, 2012. See Inclan, 95 F. Supp. 3d 490, 501-02. But that approach
overlooks a quirk in the pre-February 27, 2015 version of the NYLL. Although the
statute “extend[ed] [a] private cause of action to employees whose employer[s] fail[ed] to
provide [an] initial [wage] notice at their hire,” it did not create a private cause of action
for employees whose employers “fail[ed] to furnish the annual notice in following years.”
Yuquilema v. Manhattan’s Hero Corp., No. 13 Civ. 461 (JLC), 2014 WL 4207106, at

49

2.

Analysis

Defendants concede that Gamero may recover $2,500.00 in statutory
damages because Koo never provided him a wage notice. (Def. Br. 40 n.37).
But they argue that Mastranzo and Sanchez may not recover damages for Koo’s
violation of Section 195(1) because they were both hired before April 9, 2011,
when the WTPA took effect. (Id. at 39-40). Whether judged as a standing
question or a limitation on damages, Defendants are correct. Because Sanchez
(whom Koo hired in August 2009) and Mastranzo (who came onboard in
January 2010) started working at Koodo Sushi before the WTPA’s effective
date, they may not recover damages under Section 195(1).
C.

Plaintiffs Are Entitled to Recover Damages for Their Seventh Cause
of Action, Because Koo Never Provided Them Wage Statements
1.

Applicable Law

Section 195(3) of the New York Labor Law requires employers to “furnish
each employee with a statement with every payment of wages, listing” several
details, including the employee’s “rate or rates of pay.” NYLL § 195(3).
Employers who fail to furnish any sort of wage statement are liable under the
statute, as are “employers … [who] fail to comply with all of [Section 195(3)’s]
enumerated requirements.” Severino v. 436 W. L.L.C., No. 13 Civ. 3096 (VSB),
2015 WL 12559893, at *9 (S.D.N.Y. Mar. 19, 2015). Until February 27, 2015,

*10-11 (S.D.N.Y. Aug. 20, 2014), report and recommendation adopted, No. 13 Civ. 461
(WHP), 2014 WL 5039428 (S.D.N.Y. Sept. 30, 2014); see NYLL § 198 (1-b) (2012);
Salustio, 2017 WL 3736695, at *11.
The NYLL’s annual wage-notice requirement, then, was a right without a remedy. And
this means that even if Plaintiffs did not receive annual wage notices on, for example,
February 1, 2013, they cannot recover damages for that violation of Section 195(1).

50

an employer’s failure to provide proper wage statements “was a violation for
which plaintiffs could receive $100 per work week in damages, with a cap of
$2500.” Jrpac, 2016 WL 3248493, at *29 (internal quotation mark and citation
omitted). 14
2.

Analysis

Defendants concede that Plaintiffs may each recover $2,500.00 because
Koo did not provide them wage statements that complied with Section 195(3).
(Def. Br. 40 n.37).
D.

Plaintiffs Are Not Entitled to Relief on Their Eighth Cause of Action,
Because They Did Not Need to Purchase Tools of the Trade to Work
at Koodo Sushi
1.

Applicable Law

“Under the FLSA, an employer may not shift the cost of purchasing ‘tools
of the trade’ to an employee if ‘the cost of such tools cuts into the minimum or
overtime wages required to be paid him under the [FLSA].’” Ortega v. JR Primos
2 Rest. Corp., No. 15 Civ. 9183 (JCF), 2017 WL 2634172, at *3 (S.D.N.Y.
June 16, 2017) (quoting 29 C.F.R. § 531.35). “The same is true under New
York law.” Jrpac, 2016 WL 3248493, at *30; see 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

14

This penalty provision also changed on February 27, 2015. Cabrera, 2017 WL
1289349, at *6. Since that date, employees have been able “to recover wage-statement
statutory damages of $250 dollars for each work day that the violations occurred or
continue to occur, not to exceed $5,000.” Id. (internal quotation marks and citation
omitted). Here too, Gamero ignores this intervening legislative change, and requests
only $2,500.00 for Defendants’ violation of Section 195(3). (See Pl. CL ¶¶ 100-03; supra
n.11). And here again, the Court understands that Gamero does not seek statutory
penalties for Defendants’ post-February 27, 2015 conduct.

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employer, those expenses must not bring the employee’s wage below the
required minimum wage.”).
2.

Analysis

Plaintiffs all claim that they “were required to purchase basic necessities
in order to do their jobs.” (Pl. CL ¶ 63). These alleged necessities included:
two bicycles Gamero purchased (Pl. FF ¶ 16); a bicycle helmet “and two bicycle
lights” for Mastranzo (id. at ¶ 29); and “chef’s hats … aprons … robes … and a
knife” that Sanchez claimed he bought (id. at ¶ 45).
The Court did not believe any of this testimony. See supra, n.5. Koo
testified credibly that she did not require Plaintiffs to purchase anything in
order to work at Koodo Sushi. Indeed, Koo provided, among other items,
bicycle helmets and lights (Def. FFCL ¶¶ 96, 132-33), knives (id. at ¶ 180), and
paper hats (id. at ¶ 179). The Court thus rejects Plaintiffs’ tools-of-the-trade
claim.
E.

Plaintiffs Are Not Entitled to Relief on their Ninth Cause of Action,
Because Koo Did Not Withhold Plaintiffs’ Tips
1.

Applicable Law

“The NYLL forbids employers from retaining gratuities received by or on
behalf of employees.” Romero, 2017 WL 548216, at *11. Section 196-d
provides, in relevant part:
No employer or his agent or an officer or agent of any
corporation, or any other person shall demand or
accept, directly or indirectly, any part of the gratuities,
received by an employee, or retain any part of a gratuity
or of any charge purported to be a gratuity for an
employee.
52

NYLL § 196-d. There is an exception to this prohibition on retaining gratuities
when a customer tips on a credit card:
When tips are charged on credit cards, an employer is
not required to pay the employee’s pro-rated share of
the service charge taken by the credit card company for
the processing of the tip. The employer must return to
the employee the full amount of the tip charged on the
credit card, minus the pro-rated portion of the tip taken
by the credit card company.
12 N.Y.C.R.R. § 146-2.20.
2.

Analysis

Plaintiffs argue that Defendants unlawfully withheld a portion of the tips
they earned on delivery orders placed through Seamless. (Pl. CL ¶¶ 58-61). As
Koo testified, Seamless automatically deducts — as a commission —
approximately 14% of tips customers leave when they place orders through the
service. (Tr. 239). Defendants retort that they withheld no portion of Plaintiffs’
tips — and that Seamless is the only entity that retained any part of the tips
Plaintiffs earned.
Plaintiffs’ final cause of action thus reduces to a narrow question: Does
an employer withhold an employee’s tips, within the meaning of NYLL Section
196-d, when an online delivery service retains part of those tips as a
commission? The Court concludes that the answer is “no.”
To start, Plaintiffs’ reading of Section 196-d is inconsistent with the
statute’s text. It forbids any “employer” from retaining “any part of the
gratuities[ ] received by an employee.” NYLL § 196-d (emphasis added). That
did not happen here. Koo testified that she would receive payment for orders
53

placed through Seamless one month after those orders were fulfilled. (Tr. 23839). And by the time that money got to Koodo Sushi, Seamless had already
taken its commission: Seamless would remit to Koodo Sushi approximately
86% of the cost of meals and any tips customers left. (Id.). Koodo Sushi would
then give its delivery employees the full amount of the tips the restaurant
received from Seamless. (Id. at 239; see id. at 240 (“Seamless … would give to
me, I give [the employees] the full amount.”)). Defendants — Plaintiffs’
employers — retained none of Plaintiffs’ tips.
There is scant authority on this subject. Both parties note that there is
an unpublished decision from this District that answers this question
differently than this Court has: Allende v. PS Brother Gourmet, Inc., No. 11 Civ.
5427 (AJN), 2013 WL 11327098 (S.D.N.Y. Feb. 1, 2013). (Def. Br. 34; Pl. CL
¶ 60). Allende considered, on summary judgment, whether the service charges
a restaurant paid to three online vendors — including Seamless — amounted
to an impermissible tip deduction under Section 196-d. Allende, 2013 WL
11327098, at *5-6. The court concluded that they did. Id. at *6. Central to
Allende’s analysis was the “narrow” and “clear” language of 12 N.Y.C.R.R.
Section 146-2.20, which permits employers to withhold credit card processing
fees from its employees’ tips. Id. at *5-6. The service fees the online delivery
services charged “exceed[ed] the cost of liquidating credit card gratuities.” Id.
at *6. Seamless, for example, charged a “Marketing Services Fee” as part of its
commission. Id. Thus, Allende reasoned, there were genuine fact questions as

54

to whether these service charges amounted to an illegal tip withholding under
Section 196-d. Id.
Recognizing both the uncertainty in the law and the difference in the
respective factual records, this Court comes to a different conclusion than
Allende. Section 146-2.20 deals only with the situation in which an employer
must pay a fee to a credit card company in order to process its employees’ tips.
Although the purposes to which Seamless puts its 14% commission were not
discussed at trial, the Court infers that the commission covers more than just
credit card processing. In this sense, Section 146-2.20’s text does not save
Defendants.
But its rationale does. Section 146-2.20 recognizes that sometimes,
employers need to pay fees to third parties to ensure that their employees
receive the tips they’ve earned. Instead of requiring employers to refund credit
card processing fees to their employees, Section 146-2.20 permits employers to
pay employees their tips less necessary processing fees. Those fees are simply
the cost of doing business.
So is Seamless’s commission. Koo explained that she is required to pay
Seamless 14% of any money Koodo Sushi earns from deliveries placed through
the service. To ensure that Plaintiffs received their tips, she had to pay
Seamless’s fee. Allende took issue with the fact that part of Seamless’s
commission includes marketing fees. See Allende, 2013 WL 11327098, at *6.
And part of that commission obviously includes credit card processing fees.
But Plaintiffs did not argue — and the Court does not believe — that
55

Seamless’s credit card processing fees and non-credit card processing fees can
be disaggregated. They both fall under the umbrella of Seamless’s commission;
they are both costs of doing business with Seamless. And in this sense,
Section 146-2.20 suggests that Koodo Sushi was under no obligation to refund
Plaintiffs for the fees the restaurant needed to pay in order for Seamless to
process Plaintiffs’ tips.
Allende noted (disapprovingly) that Seamless’s commission “exceed[ed]
the cost of liquidating credit card gratuities.” Allende, 2013 WL 11327098.
But that assumes that “liquidating” a credit card tip encompasses only the act
of paying a credit card company’s processing fee. On this score, the Court also
disagrees. When a customer orders dinner from Koodo Sushi through
Seamless and indicates the amount she wishes to tip, that tip exists in the
ether. Koodo Sushi does not realize the tip until one month after the order is
placed, when Seamless gives the restaurant the money the restaurant earned
from the customer’s Seamless order, less Seamless’s commission. Put another
way: In order to liquidate the tips Seamless customers pay Koodo Sushi’s
delivery employees, Koodo Sushi must pay Seamless’s commission. That
commission may be higher than a typical credit card processing fee (although
Plaintiffs introduced no evidence to show this is the case). But in effect,
Seamless’s commission and credit card processing fees serve the same
purpose.
A case that Allende discussed, Myers v. The Copper Cellar Corporation,
192 F.3d 546 (6th Cir. 1999), illustrates this point. See Allende, 2013 WL
56

11327098, at *5. Copper Cellar, a Tennessee steakhouse chain, withheld a flat
three percent of tips its customers left on credit cards. Myers, 192 F.3d at 548,
552-53. Copper Cellar would then use this money to pay credit card
processing fees; the actual fees varied depending on, inter alia, the type of
credit card a customer used. Id. at 553. Appellants, former Copper Cellar wait
staff, argued that this deduction violated Section 203(m) of the FLSA, which
“command[s] that a tipped employee must be permitted to retain all gratuities
received by that employee.” Id. at 548, 552. The Sixth Circuit rejected
appellants’ argument. Id. at 555-56. It concluded “that, as a matter of law, an
employer may subtract a sum from an employee’s charged gratuity which
reasonably compensates it for its outlays sustained in clearing that tip.” Id. at
553.
“Before an employee can be entitled to attain any funds on account of a
charged customer gratuity,” the Myers panel wrote, “that debited obligation
must be converted into cash.” Myers, 192 F.3d at 553. And an “employer,”
Myers explained, “has an obvious legal right to deduct the cost of
converting … credited tip[s] to cash,” because “[t]he liquidation of [a] restaurant
patron’s paper debt to the table server require[s] the predicate payment of a
handling fee to the credit card issuer.” Id. at 553-54 (emphasis added).
Indeed, the Sixth Circuit even approved of employers deducting “a fixed
composite percentage handling fee” from its employees’ tips, so long as that
fixed deduction “did not enrich [the employer].” Id. at 555.

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This Court sees no material difference between Seamless’s commission
and the credit card processing fees Myers condoned. Their effect is the same:
Koo paid Seamless a 14% commission in order to “clear[ ]” the tips her
employees earned through the service. See Myers, 192 F.3d at 553. Like a
credit card processing fee, Seamless’s commission is an unavoidable charge
Koodo Sushi must pay before its employees receive their tips. And the Court
finds telling Myers’s concern that an employer might “enrich” itself by
withholding a percentage of its employees’ tips in order to pay credit card fees.
Id. at 555. By paying Seamless’s 14% commission, Koodo Sushi did not enrich
itself at all. To the contrary, Koo gave her employees the full balance of their
tips (less Seamless’s commission).
The Court offers one final, but significant, factual point. Exhibit A to
Plaintiffs’ Findings of Fact and Conclusions of Law is a detailed breakdown of
the wage-and-hour damages Plaintiffs are requesting. (Pl. FFCL, Ex. A). But
Plaintiffs do not include among those damages any damages claimed as a
result of Defendants’ alleged violation of Section 196-d. (See id.). Indeed,
Plaintiffs do not provide any indication of how much they are seeking for their
Ninth Cause of Action. (Cf. Pl. CL ¶ 61 (“[T]he Court should permit damages
for all [S]eamless … deductions made against Plaintiffs’ wages.”)). Nor have
they requested a damages inquest. Perhaps this was an oversight on Plaintiffs’
part — although this seems unlikely, given that Plaintiffs have calculated
proposed damages for their other causes of action. (Id. at ¶¶ 106-10; see Pl. FF
¶¶ 16, 29, 45 (listing prices of Plaintiffs’ claimed “tools of the trade”)). But as
58

things stand, Plaintiffs have not requested any damages for their Section 196-d
claim. The Court therefore considers the claim abandoned.
In sum, the Court concludes that the commissions Defendants paid to
Seamless did not amount to an impermissible tip withholding under Section
196-d. Defendants retained none of Plaintiffs’ tips.
F.

Plaintiffs May Recover Prejudgment Interest on Their Unpaid Wages
Under the NYLL
1.

Applicable Law

“Prejudgment interest may be awarded in addition to liquidated damages
under [the] NYLL[.]” Pineda, 2017 WL 1194242, at *4; see NYLL § 198(1-a).
“New York law sets the relevant interest rate at nine percent per year.” Ortega,
2017 WL 2634172, at *6 (citing N.Y. C.P.L.R. § 5004). And to determine when
prejudgment interest begins to accrue, “[c]ourts applying [the] NYLL in
wage-and-hour cases ‘often choose the midpoint of the plaintiff’s employment
within the limitations period.’” China 1221, 2016 WL 1587242, at *6 (quoting
Tackie v. Keff Enters. LLC, No. 14 Civ. 2074 (JPO), 2014 WL 4626229, at *6
(S.D.N.Y. Sept. 16, 2014)).
An NYLL plaintiff may recover prejudgment interest only on his “actual
damages … under the NYLL, … not [his] liquidated damages.” Ortega, 2017 WL
2634172, at *6. “Prejudgment interest is [also] not available for violations of
the wage statement or wage notice provisions.” Salustio, 2017 WL 3736695, at
*14.

59

2.

Analysis

Plaintiffs are all entitled to recoup prejudgment interest on their unpaid
wages under the NYLL:
Sanchez: Sanchez’s actual damages under the NYLL are $2,311.58. The
Court calculates the midpoint of his employment as April 9, 2012.
Mastranzo: Mastranzo’s actual NYLL damages are $3,668.07. The
midpoint of his employment was July 30, 2012.
Gamero: Gamero’s unpaid wage damages are $2,535.00. Calculating
when prejudgment interest began to accrue on this figure is complicated by the
fact that Gamero left Koodo Sushi for one year. And this analysis is
complicated further because there is no clear indication of when Gamero
stopped working, or when he returned. Cf. Maldonado v. La Nueva Rampa,
Inc., No. 10 Civ. 8195 (JLC), 2012 WL 1669341, at *7, *11 (S.D.N.Y. May 14,
2012) (calculating midpoint of employment for employee who worked at
“[r]estaurant during two separate periods” by looking to midpoint of each
period and “calculat[ing] the principal amounts owed in” damages “for each
period”).
For purposes of calculating prejudgment interest, the Court will assume
that Gamero left Koodo Sushi in November 2013 and returned one year later,
as he testified. (See Tr. 120, 132). Accounting for this gap, the midpoint of
Gamero’s tenure with Koodo Sushi was August 5, 2013.

60

CONCLUSION
For the reasons set forth above, the Court concludes that Plaintiffs are
entitled to relief under their First through Seventh Causes of Action. The Clerk
of Court is directed to prepare a judgment reflecting the Court’s holding and
setting forth Plaintiffs’ damages as follows:
Sanchez: $2,311.58 in unpaid wages under the NYLL, with
9% prejudgment interest beginning to accrue on April 9, 2012;
$972.43

in

liquidated

damages;

and

$2,500.00

for

Defendants’ violation of NYLL § 195(3).
Mastranzo: $3,668.07 in unpaid wages under the NYLL, with
9% prejudgment interest beginning to accrue on July 30,
2012; $2,915.04 in liquidated damages; and $2,500.00 for
Defendants’ violation of NYLL § 195(3).
Gamero: $2,535.00 in unpaid wages under the NYLL, with
9% prejudgment interest beginning to accrue on August 5,
2013; $2,535.00 in liquidated damages; $2,500.00 for
Defendants’ violation of NYLL § 195(1); and $2,500.00 for
Defendants’ violation of NYLL § 195(3).
“[I]f any amounts 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.” NYLL § 198(4).
***
61

Plaintiffs are also entitled to recover their costs and “reasonable
attorney’s fees.” NYLL § 663(1). Given that Plaintiffs’ recovery is far smaller
than they requested, the Court strongly encourages the parties to reach a
mutual agreement on attorney’s fees and costs. In the event the parties cannot
reach consensus, Plaintiffs are ORDERED to file a motion for fees and costs on
or before October 25, 2017. Defendants shall oppose the motion on or
before November 8, 2017. Plaintiffs may not file a reply brief.
The Clerk of Court is directed to terminate all pending motions, adjourn
all remaining dates, and close this case.
SO ORDERED.
Dated:

September 28, 2017
New York, New York

__________________________________
KATHERINE POLK FAILLA
United States District Judge

62