Secretary of Labor, Thomas E. Perez v. Manna 2nd Avenue LLC d/b/a Gina La Fornarina et al

Filing 116

OPINION AND ORDER: For the reasons set forth above, and consistent with the prior rulings of the Court and stipulations of the parties, judgment shall be entered in favor of the Secretary and against the defendants, jointly and severally as follo ws: $101,532.90 in unpaid overtime wages owed for the period June 16, 2012, through June 15, 2013; $101,532.90 in liquidated damages for the period June 16, 2012, through June 15, 2013; $45,101.42 in back wages previously awarded by the Court on summary judgment; $45,101.42 in liquidated damages previously awarded by the Court on summary judgment; $35,007.68 in overtime wages owed to the non-exempt salaried pizza chefs as stipulated in the Joint Pretrial Order,  7; VI(9); $35,007.68 in liquidated damages owed to the nonexempt salaried pizza chefs as stipulated in the Joint Pretrial Order, § VI(9); and Enjoining the defendants, their officers, agents, servants, employees, and those persons in act ive concert or participation with the defendants from violating the provisions of sections 6, 7, 11(c), 15(a)(3), and 15(a)(5) of the Fair Labor Standards Act. The Clerk of Court shall enter judgment accordingly and close this case. SO ORDERED. (Signed by Magistrate Judge James C. Francis on 10/12/2017) Copies Transmitted this Date By Chambers. (anc)

and conclusions of law pursuant to Rule 52(a) of the Federal Rules
of Civil Procedure.
Background
Defendant Paola Pedrignani is the owner of the four corporate
defendants -- Manna 2nd Avenue LLC, Manna Madison Avenue LLC, Manna
Amsterdam Avenue LLC, and Manna Lexington Avenue LLC -- all of
which

operated

during

the

relevant

period

as

Italian

pizza

restaurants under the name Gina La Fornarina at different locations
in Manhattan.

Perez v. Manna 2nd Avenue LLC, No. 15 Civ. 4655,

2017 WL 780812, at *1 (S.D.N.Y. Feb. 28, 2017); (Tr. at 121-22;
Exh. P-15 at 18-19).2

The four locations were managed by Ms.

Pedrignani together with the general manager, Igor Segota, and
Alfredo Bello Herrera.

(Joint Pretrial Order (“JPTO”), § VI(3)).

They employed a variety of workers, categorized as kitchen chefs,
pizza chefs, dishwashers, salad makers, prep cooks, trainees,
servers,

bussers,

runners,

porters,

baristas, and delivery workers.

general

captains,

hosts,

Perez, 2017 WL 780812, at *1.

It

is undisputed that Ms. Pedrignani was a joint employer together
with each of the corporate defendants. (JPTO, § VI(2); Stipulation
dated Aug. 24, 2016, attached as Exh. 1 to Declaration of Amy Tai
dated Sept. 16, 2016, ¶ 10).

“Tr.” refers to the trial transcript, while “Exh.” refers
to trial exhibits.
2

2

The

Department

defendants in 2013.

of

Labor

began

an

investigation

Perez, 2017 WL 780812, at *1.

of

the

Thereafter, it

filed the instant action, alleging that the defendants: (1) failed
to pay their employees overtime in accordance with the FLSA for
the period from June 16, 2012, to November 18, 2015, in part
because they (a) failed to aggregate an employee’s hours when the
employee worked at multiple Gina La Fornarina locations in the
same week and (b) improperly paid pizza chefs on a salaried basis
without paying overtime; (2) failed to pay certain employees the
required minimum wage; and (3) violated the FLSA’s recordkeeping
requirements by failing to keep, maintain, and preserve adequate
and accurate records.

Id.; (JPTO, § IV(A)).

Following the completion of discovery, both parties moved for
partial summary judgment, and I denied the defendants’ motion and
granted the Secretary’s motion in part and denied it in part.
Perez, 2017 WL 780812, at *8.

I found that certain pizza chefs

did not qualify for the executive exemption under the FLSA and
therefore

had

been

improperly

denied

overtime,

while

factual

uncertainties precluded a determination as to other pizza chefs.
Id. at *3-6.

As to other types of employees, I granted summary

judgment to the Secretary and determined that these employees were
entitled to overtime for the period from June 16, 2013, to November
18, 2015, as well as liquidated damages.

3

Id. at *6-8.

Subsequently, the parties resolved most of the remaining
issues.

They agreed that none of the pizza chefs were exempt from

the FLSA’s overtime provisions.
that

the

defendants

requirements.

(JPTO,

had
§

(JPTO, § VI(6)).

violated
VI(10)).

the
And

FLSA’s
they

They agreed
recordkeeping

agreed

that

the

defendants had not complied with the FLSA’s overtime provisions
for the period from June 16, 2012, through June 15, 2013.
§ VI(7)).3

(JPTO,

However, the statute of limitations for FLSA claims is

two years unless any violation is willful, in which case the
limitations period is three years.

29 U.S.C. § 255(a); Herman v.

RSR Security Services Ltd., 172 F.3d 132, 141 (2d Cir. 1999).
Since the Complaint here was filed on June 16, 2015, the Secretary
can recover for the period from June 16, 2012, through June 15,
2013, only if it is determined that the defendants acted willfully.
That is the issue that was tried.
Analysis
In order to establish willfulness in an FLSA action, it must
be demonstrated that the employer either knew or showed reckless
disregard for whether its conduct was prohibited by the statute.
McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988); Parada
v. Banco Industrial de Venezuela, C.A., 753 F.3d 62, 71 (2d Cir.
2014).

The burden of proof is on the plaintiff.

Parada, 753 F.3d

The parties also agreed to dismiss without prejudice the
Secretary’s minimum wage claim. (JPTO, § VI(11)).
3

4

at 71; Young v. Cooper Cameron Corp., 586 F.3d 201, 207 (2d Cir.
2009).

“Employers may be found to have acted recklessly pursuant

to the FLSA if they made neither a diligent review nor consulted
with

counsel

regarding

their

classifications of employees.”

overtime

practices

and

DiFilippo v. Barclays Capital,

Inc., 552 F. Supp. 2d 417, 425 (S.D.N.Y. 2008); accord Berrios v.
Nicholas Zito Racing Stable, Inc., 849 F. Supp. 2d 372, 392
(E.D.N.Y. 2012).
a

good

faith

--

Nevertheless, “an employer’s mere negligence or
but

incorrect

--

belief

that

they

were

in

compliance with the FLSA, are not sufficient to rise to the level
of a willful violation.”

DiFilippo, 552 F. Supp. 2d at 425.

It is uncontested that many of the defendants’ employees
worked at more than one Gina La Fornarina location in any given
work week, but when they did so, their hours were not aggregated;
for example, if an employee worked twenty-five hours at the
Amsterdam location and twenty-five hours at the Madison Avenue
location in the same week, he would receive one check from each
corporation and would not receive overtime pay even though he had
worked more than forty hours in total.

(JPTO, § VI(7)(a)).

Likewise, when employees performed different jobs during the same
week, their hours were not aggregated for purposes of paying
overtime.

(JPTO, § VI(7)(b)).

What is disputed is whether the

defendants engaged in these practices innocently, or willfully
violated the employees’ rights under the FLSA.
5

At trial, two employees testified on behalf of the Secretary.
The first, Sosimo Dionisio, began working for the defendants in
2011, initially only at the 2nd Avenue location.

(Tr. at 17, 19).

When Mr. Dionisio worked exclusively at one location, he received
a single check that included overtime pay for any hours worked
over forty in a week.

(Tr. at 20).

However, five or six months

after he began work, Igor Segota, the manager, began assigning Mr.
Dionisio to work at the Amsterdam Avenue location as well as the
2nd Avenue location during the same week.

(Tr. at 21-24).

When

he worked at two locations, he would receive one check from each
and would not receive overtime for all of the hours that he worked.
(Tr. at 26).

When Mr. Dionisio asked Mr. Segota to be paid in a

single check in order to receive overtime, he was told this was
not possible.

(Tr. at 27).

When Mr. Dionisio was first assigned to work at more than one
location, he asked Mr. Segota why he was being moved around, and
he was told that it was not Mr. Segota’s decision, but Ms.
Pedrignani’s.

(Tr. at 27-28).

He also overheard discussions that

Mr. Segota had with Ms. Pedrignani at the restaurants, during which
they discussed the scheduling of employees.
41).

(Tr. at 24-25, 40-

According to Mr. Dionisio, at these meetings, Ms. Pedrignani

indicated that she “didn’t like paying overtime,” and Mr. Segota
suggested that the best way to avoid doing so was to assign the
employees to multiple locations.

(Tr. at 24-25, 41-42).
6

Mr. Dinisio also testified that he worked as a busboy and a
barista or a barista and a waiter during the same week.
28-29).

(Tr. at

In those weeks he got multiple checks, one each for a

specific job category at a particular Gina La Fornarina location.
(Tr. at 30).

He did not receive overtime when his total hours in

two job functions exceeded forty in a week, even if he performed
both roles in the same location.

(Tr. at 30-33).

The second employee, Walberto Ruiz, testified that he began
working in 2010 at the Second Avenue location of Gina La Fornarina.
(Tr. at 53-54).

For the first few weeks, he worked only at that

location, but was later assigned to additional locations.
54-55).

(Tr. at

Initially, he “helped out” perhaps twice a week at the

Amsterdam Avenue location and was paid with a single check.
at 55-56).

(Tr.

However, when Mr. Segota became the manager, he

assigned Mr. Ruiz approximately three days each week to Second
Avenue and three days to Amsterdam.

(Tr. at 56-57).

In total,

Mr. Ruiz worked over fifty hours per week but received his pay in
two checks that did not include any overtime premium.

(Tr. at 57-

58).
When

the

Madison

Avenue

location

approached Mr. Ruiz about working there.

opened,

Mr.

(Tr. at 58).

Segota
Mr. Ruiz

asked if he could work in a single location so that he could
accumulate overtime.

(Tr. at 58).

7

Mr. Segota responded that he

could only offer ten hours of overtime.

(Tr. at 58).

According

to Mr. Ruiz, Mr. Segota told him,
If I want more I can work in different location because
he has to balance the hours . . . . So what I understand,
that he didn’t want me to work more than 50 hours in
that location, like that he doesn’t going to pay me more
than 10 hours in overtime. Like that he would pay me
regular rate in another location.
(Tr. at 58-59; see also Tr. at 62-63).
The testimony of these witnesses, or at least the implication
that

assignments

were

being

manipulated

to

avoid

the

legal

obligation to pay overtime, was challenged by Ms. Pedrignani.
Prior to opening the Gina La Fornarina restaurants, Ms. Pedrignani
had been employed as a manager at a number of restaurants in
Manhattan.

(Tr. a 122).

In that role, she managed employees but

did not set pay rates or handle payroll, though she was familiar
with the general concept of overtime pay.
When

Ms.

Pedrignani

established

(Tr. at 122-24).

Gina

La

Fornarina,

she

engaged counsel to advise her on her leasing arrangements, but she
did

not

seek

requirements.
multiple

legal

advice

with

respect

(Tr. at 137, 143, 173).

locations,

each

of

which

to

wage

and

hour

Then, when she opened

operated

as

a

separate

corporation, she assumed that it was appropriate to pay employees
with separate checks, based on the work they performed at each
specific location, just as it was appropriate not to combine her
employees’ hours with hours that they spent working for wholly

8

unrelated restaurants. (Tr. at 142). According to Ms. Pedrignani,
her accountant confirmed this assumption.

When she asked him, “Do

I have to combine the hours?”, he replied, “No, you have to pay
everybody from each different location.

How are we going to know

how to do taxes at the end of the year?

How are you going to know

your [profit and loss]?”

(Tr. at 157).

However, she did not ask

the accountant, or anyone else, whether the law required the
aggregation of hours for overtime pay.
Ms.

Pedrignani

acknowledged

(Tr. at 172-73).

shifting

employees

from

one

location to another, but denied that the primary reason for doing
so was to avoid paying overtime.

Rather, she maintained that this

was generally done because an employee was being trained or an
employee was particularly good and she wanted him to bring his
expertise

to

a

different

location.

(Tr.

at

144-46,

160).

Similarly, Ms. Pedrignani conceded that when an employee worked in
more than one job category during a week he received separate
checks for the hours worked in each position, but she stated that
this practice was necessitated by the complexities of paying an
employee at two different rates and was consistent with his working
in two different “departments.”

(Tr. at 161-63).

Finally, Ms.

Pedrignani acknowledged conducting meetings in the restaurants
(Tr. at 131-32), but she denied that these

conferences

ever

concerned limiting the amount of overtime, as alleged by Mr.
Dionisio (Tr. at 132, 168).
9

There is nothing incredible about the testimony of either the
employee witnesses or Ms. Pedrignani standing alone.

Nor did the

demeanor of any of these witnesses suggest that they were being
untruthful.

However, the objective evidence -- the defendants’

own payroll records and the analysis of those records by the
Secretary’s investigator -- plainly corroborates the testimony of
the employees and undermines the defendants’ position.
First, the defendants regularly scheduled employees to work
at more than one location in the same week, as the employee
witnesses

testified.

The

following

chart

lists

the

hourly

employees (other than pizza chefs) who worked more than twentyfive weeks within the relevant period

and who the Secretary

contends are owed overtime wages; it shows the total number of
weeks that they worked at one, two, or three locations:
NAME

1 LOCATION

2 LOCATIONS

3 LOCATIONS

Acho, A.
Bajrami, B.
Cardoso, S.
Dionisio, S.
Fierro, A.
Fuentes, V.
Gomez, C.
Gonzalez, M.
Gutierrez, P.
Irigoyen, R.
Martinez, M.
Miranda, R.
Ruiz, W.
Shala, B.
Velasquez, M.

0
0
0
0
1
2
0
19
2
0
0
42
0
0
1

28
27
37
43
38
23
25
9
49
46
43
1
37
24
48

5
3
1
1
9
24
1
0
0
2
6
0
8
5
0

10

(Exh. P-1).
two

or

As can be seen, a large number of employees worked at

sometimes

contradicts

Ms.

three

locations

Pedrignani’s

in

testimony

the

same

that

week.

the

This

shifting

of

workers was done merely for training purposes or to bring “best
practices” from one location to another.
Second, the data show that, within a given week, employees in
the same job category were often swapped between two locations.
For example, during the week ending July 1, 2012, Timmy Dema,
Sosimo Dionisio, Alfonso Fierro, and Oscar Moreno all performed
dining

room

functions

at

both

the

Amsterdam

and

2nd

Avenue

locations as follows:
NAME

AMSTERDAM

Dema, T.
Dionisio, S.
Fierro, A.
Moreno, O.
(Exh. P-1 at 19, 22, 26, 78).

46.26
11.07
5.28
51.45

2nd AVENUE
10.16
48.09
55.90
6.48

Mr. Dema and Mr. Moreno worked the

vast majority of their time at Amsterdam and the balance at 2nd
Avenue, while Mr. Dionisio and Mr. Fierro did precisely the
opposite.

The defendants offer no plausible business explanation

for switching employees between locations in this fashion.

A

strong inference can be drawn that this pattern is the consequence
of an intentional effort to limit the hours that these employees
worked at any one location during a week in order to avoid paying
them overtime.
11

This inference is confirmed when one looks at the frequency
with which assignments were divided between two locations when the
employee was close to exceeding forty hours in a week at one of
them.

During the week of January 13, 2013, for example, Severo

Cardoso worked forty-five hours at Amsterdam and twenty-one hours
in the same role at Madison (Exh. P-1 at 17); Alfonso Fierro worked
thirty-eight hours at Amsterdam and twenty-three hours at 2nd
Avenue (Exh. P-1 at 27); Victor Fuentes worked thirty-six hours at
2nd Avenue and twenty-four hours at Amsterdam (Exh. P-1 at 31);
Jesus German worked thirty-five hours at Amsterdam and twenty-six
hours at 2nd Avenue (Exh. P-1 at 38); Pedro Gutierrez worked
thirty-seven hours at 2nd Avenue and twelve hours at Amsterdam
(Exh. P-1 at 47); Jorge Louis worked forty hours at 2nd Avenue and
twenty-six hours at Amsterdam (Exh. P-1 at 59); and Besfort Shala
worked thirty-seven hours at Amsterdam and sixteen hours at 2nd
Avenue (Exh. P-1 at 99).
Furthermore, the defendants acknowledge that they failed to
aggregate hours for overtime purposes when employees performed two
different roles at the same location (JPTO, § VI, ¶ 7(b)), and
this is borne out by the records (Tr. at 88).

For instance, during

the work week ending March 17, 2013, Elena Scherbak worked at the
2nd Avenue location for a total of forty-seven hours; however, she
did

not

receive

overtime

because

the

defendants

payed

her

separately for the 16.15 hours she worked in the office and the
12

30.85 hours she worked as a hostess.

(Tr. at 77-79).

Yet, the

rationale that the defendants proffer for paying separately for
work done at different locations

-- that the locations were

separate corporations with separate profit and loss structures -simply does not apply to employees like Ms. Scherbak who worked at
a single location.
Finally,

the

defendants’

awareness

of

their

legal

responsibility to aggregate hours can be gleaned from the fact
that they did so initially.

Thus, when Carlos Temaj, for example,

worked in two different capacities for the week ending July 1,
2012, he was paid in a single check and received overtime, yet
when he worked the same pattern in the week ending September 30,
2012, his hours were divided according to job category, and he was
deprived of overtime pay.

(Tr. at 79-84).

In sum, the data support the Secretary’s position that the
defendants deliberately structured their payroll to avoid paying
overtime by segregating hours according to restaurant location and
job function.

Whether this was done at Ms. Pedrignani’s behest or

by the manager, Mr. Segota, without her direct involvement, is
immaterial.4

The defendants took no reasonable steps to ascertain

Although the employee witnesses testified that Mr. Segota
explicitly told them that he was arranging the work schedule to
avoid overtime, Mr. Segota did not testify at trial to rebut this.
Accordingly, I may draw the inference that, if he had testified,
he would not have disputed the employees’ testimony. See Chevron
Corp. v. Donziger, 974 F. Supp. 2d 362, 700 & n.161 (S.D.N.Y. 2014)
4

13

whether their practices were legal, despite knowing that they were
required to pay overtime. At a minimum, their conduct was reckless
and therefore willful.
Conclusion
For the reasons set forth above, and consistent with the prior
rulings of the Court and stipulations of the parties, judgment
shall

be

entered

in

favor

of

the

Secretary

and

against

the

defendants, jointly and severally as follows:
1. $101,532.90 in unpaid overtime wages owed for the
period June 16, 2012, through June 15, 2013;
2. $101,532.90 in liquidated damages for the period June
16, 2012, through June 15, 2013;
3. $45,101.42 in back wages previously awarded by the
Court on summary judgment;
4. $45,101.42 in liquidated damages previously awarded
by the Court on summary judgment;
5. $35,007.68 in overtime wages owed to the non-exempt
salaried pizza chefs as stipulated in the Joint Pretrial
Order, § VI(9);
6. $35,007.68 in liquidated damages owed to the nonexempt salaried pizza chefs as stipulated in the Joint
Pretrial Order, § VI(9); and
7. Enjoining the defendants, their officers, agents,
servants, employees, and those persons in active concert
or participation with the defendants from violating the
provisions of sections 6, 7, 11(c), 15(a)(3), and
15(a)(5) of the Fair Labor Standards Act.

(holding that “an adverse inference may be appropriate based on
the failure to testify of someone closely allied with or related
to a party, such as an employee”).
14