Hong v. JP White Plains, Inc. et al

Filing 38

OPINION & ORDER re: 33 MOTION to Dismiss Complaint pursuant to Rule 12(b)(1) and Rule 12(b)(6). filed by Haiku @ WP, Inc., JP Scarsdale, Inc., JP White Plains, Inc., JP Bronxville, Inc., Hsing Ya Chang, Soonwah Lee, Piet ro Diana, Jie Zhang. For the foregoing reasons, Defendants' Motion to dismiss the Amended Complaint is GRANTED in part and DENIED in part. The Court dismisses with prejudice claims against JP Bronxville, JP Scarsdale, Pietro Diana, Hsingya Chang, and Jie Zhang. The claims against defendant Lee, JP White Plains and Haiku @ WP for wage-and-hour and recordkeeping violations under the FLSA and NYLL remain. Accordingly, Defendants Lee, JP White Plains and Haiku @ WP are directed to answer the remaining portions of the Amended Complaint by May 5, 2021, and the parties are directed to file a completed Case Management Plan and Scheduling Order on the docket (template attached) by May 19, 2021. The Clerk of the Court is respe ctfully directed to (1) terminate the motion at ECF No. 33, and (2) terminate JP Bronxville, JP Scarsdale, Pietro Diana, Hsingya Chang, and Jie Zhang as Defendants. SO ORDERED., JP Bronxville, Inc., JP Scarsdale, Inc., Jie Zhang, Hsing Ya Chang and Pietro Diana terminated., Soonwah Lee answer due 5/5/2021; JP White Plains, Inc. answer due 5/5/2021; Haiku @ WP, Inc. answer due 5/5/2021. (Signed by Judge Nelson Stephen Roman on 3/31/2021) (rj)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
YINGCAI HONG, on behalf of himself and all
others similarly situated,
Plaintiff,
v.

3/31/2021

19 CV 5018 (NSR)
OPINION & ORDER

JP WHITE PLAINS, INC. et al.,
Defendants.
NELSON S. ROMÁN, United States District Judge
In this putative collective and class action, Plaintiff Yingcai Hong (“Plaintiff” or “Hong”),
a former deliveryman, brings wage-and-hour and recordkeeping claims against four companies
and individuals involved in the Haiku Asian Bistros in Westchester, New York. Hong brings these
claims under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 190 et seq., and New York
Labor Law (“NYLL”), N.Y. Lab. Law. § 190 et seq., § 650 et seq. Defendants JP WHITE PLAINS,
INC. d/b/a Haiku Asian Bistro White Plains; HAIKU @ WP INC. d/b/a Haiku Asian Bistro White
Plains; JP BRONXVILLE INC. d/b/a Haiku Asian Bistro Bronxville; JP SCARSDALE INC. d/b/a
Haiku Asian Bistro Scarsdale (collectively, the “Corporate Defendants”); SOONWAH LEE a/k/a/
Michael Lee; PIETRO DIANA a/k/a Peter Diana; HSINGYA CHANG a/k/a/ John Chang; and JIE
ZHANG a/k/a/ Jack Zhang (collectively, “the Individual Defendants” and, with Corporate
Defendants, “Defendants”) have moved to dismiss the Amended Complaint under Federal Rules
of Civil Procedure 12(b)(1) and 12(b)(6). (ECF No. 33.) For the following reasons, Defendants’
Motion is GRANTED in part and DENIED in part.
BACKGROUND
The facts herein are drawn from the Amended Complaint (“AC” (ECF No. 28)) and are
assumed to be true for purposes of this motion.

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Haiku Asian Bistro operates in multiple locations in Westchester County, New York, and
elsewhere, including White Plains, Bronxville, and Scarsdale. Hong alleges that from about
November 2015 to August 2016 and again from February 2017 to May 20, 2018, Defendants
employed Hong as a deliveryman at Haiku in White Plains. (AC ¶¶ 7, 34.)
Until December 2017, Hong worked an average of 58.5 hours per week (id. at ¶¶ 38-40)
and was paid $7.50 per hour (id. at ¶ 46.) From January 2018 to May 2018, he worked an average
of 50.5 hours per week (id. at ¶¶ 41-43) and was paid $9.15 per hour (id at ¶ 47). Throughout his
employment by Defendants, Hong was required to work through his hour and a half “break” two
days per week and did not have a fixed time for lunch or dinner. (Id. at ¶¶ 39, 42, 44). During his
employment, $10 per week was deducted in cash tips, $20-$25 per week was deducted as a meal
credit, and $24 per week was deducted for transportation. (Id. at ¶ 50.) Plaintiff’s meals did not
include any tea, coffee, milk, or juice. (Id. at ¶ 52.) Hong was never informed of his hourly pay
rate or any tip deductions toward the minimum wage. (Id. at ¶ 48.) Finally, Hong did not receive
a weekly pay statement, or notice of the deductions to his tips, transportation, or meals. (Id. at
¶¶ 53-54.)
Each workday, Hong drove an average of two miles each way to deliver about 25 customer
orders, totaling approximately 100 miles per workday. (Id. at ¶¶ 58-59.) On average, two or three
orders per day were outside the 4.5-mile delivery radius, and for making such deliveries, Hong
earned an extra $3 in tips. (Id. at ¶ 60-61.) Hong was “required to bear the cost of the purchase of
a motor vehicle, and the costs of gasoline,” and alleges that he was not reimbursed for the cost of
gasoline or vehicle maintenance. (Id. at ¶ 57, 62.) Additionally, for a period of five months, Hong
served as the transportation van driver and was compensated in this role $5 for forty to sixty
minutes of non-tipped work. (Id. at ¶ 51.)
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As a result of the foregoing, Hong alleges that he was paid less than the federal minimum
wage for the first forty hours per week and less than the required 1.5 times the federal minimum
wage for each hour worked in excess of 40 hours per week. (Id. at ¶ 55.) Since the New York
minimum wage was higher than the federal minimum wage for all relevant periods, his pay was
also below the New York minimum wage at all relevant times. (Id. at ¶ 56.)
Hong alleges that Mr. Lee is an “owner” of the “Haiku Asian Bistro enterprise,” who
authorized a Delivery Head named “Ah Xu” to hire Plaintiff, authorized a Telephone Attendant
named “Ah Ling” to pay wages to Plaintiff, and asked an unnamed Manager to fire Plaintiff. (Id.
at ¶¶ 21-24.) Hong further alleges that Corporate Defendants constitute an “enterprise” in that they
share staff, advertise as an enterprise, share a common website and logos, and are co-owned by
the same partners. (Id. at ¶¶ 29, 32.) The Amended Complaint contains exhibits including printouts
from Haiku’s website, which indicates that the brand has locations in White Plains, Bronxville,
Scarsdale, among other places; press from 2019 announcing the opening of two additional Haiku
locations, describing Haiku as an “empire” and a “Pan-Asian restaurant mini-chain.” (ECF No.
28-8); and various other press clippings describe the opening of the first Haiku location around
2004 and subsequent expansion in Westchester and on Long Island, mentioning that the owners
are Michael Lee, Peter Diana, and John Chiang. (ECF Nos. 28-4, 28-5, 28-6, 28-7.) Hong further
alleges that Mr. Lee, Mr. Diana, Mr. Chang, and Mr. Zhang are “shareholders” of the “Haiku Asian
Bistro enterprise.” (AC at ¶¶ 26-31.)
Hong filed this action on May 31, 2019. (ECF No. 1.) The Court granted Hong leave to file
an Amended Complaint and Defendants leave to move to dismiss the Amended Complaint.
(Minute Entry Dated Feb. 6, 2020.) Hong filed an Amended Complaint on February 27, 2020
asserting thirteen causes of action: (I) meal transportation credit violation under 29 U.S.C.
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§ 203(m) and 29 C.F.R. § 531.3; (II) illegal tip retention under 29 U.S.C. § 203(m) and (t);
(III) meal credit violation under NYCRR; (IV) illegal tip retention under NYLL § 146-2.18 and
2.20; (V) failure to pay minimum wage and unpaid wages under 29 USC § 206; (VI) failure to pay
minimum wage and unpaid wages under NYLL; (VII) failure to pay overtime in violation of 29
U.S.C. § 207(a); (VIII) failure to pay overtime in violation of NYLL; (IX) failure to provide meal
periods in violation of NYLL; (X) failure to keep records in violation of NYCRR § 14602.1; (XI)
failure to provide time of hire wage notice in violation of NYLL § 195-1(a); (XII) failure to provide
wage statements in violation of NYLL § 195-1(d); and (XIII) failure to pay delivery experts
working on the road standard mileage reimbursement rate published by the Internal Revenue
Service. (ECF No. 28.) Defendants’ motion to dismiss is now before the Court. (ECF No. 33.)
I.

Defendants’ Rule 12(b)(1) Motion
Defendants aver that this matter should be dismissed under Rule 12(b)(1) because Plaintiff

lacks standing to sue them.
A.

Applicable Legal Standard

A court properly dismisses a claim for lack of subject matter jurisdiction under Rule
12(b)(1) when it “lacks the statutory or constitutional power to adjudicate it, such as when . . . the
plaintiff lacks constitutional standing to bring the action.” Cortlandt St. Recovery Corp. v. Hellas
Telecomms., 790 F.3d 411, 416-17 (2d Cir. 2015) (citations and quotation marks omitted). “[T]he
‘irreducible constitutional minimum’ of standing” requires that the plaintiff have “(1) suffered an
injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is
likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540,
1547 (2016) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)).

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“The plaintiff, as the party invoking federal jurisdiction, bears the burden of establishing”
each element of constitutional standing. Id. (citations omitted). Because “the elements of Article
III standing are not mere pleading requirements but rather an indispensable part of the plaintiff’s
case, each element must be supported . . . with the manner and degree of evidence required at the
successive stages of the litigation.” Carter v. HealthPort Techs., LLC, 822 F.3d 47, 56 (2d Cir.
2016) (citations omitted). “At the pleading stage, general factual allegations of injury resulting
from the defendant’s conduct may suffice, for on a motion to dismiss we presum[e] that general
allegations embrace those specific facts that are necessary to support the claim.” Lujan, 504 U.S.
at 561.
“A Rule 12(b)(1) motion challenging subject matter jurisdiction may be either facial or
fact-based.” Id. Such a motion is facial when it is “based solely on the allegations of the complaint
or the complaint and exhibits attached to it.” Id. In such cases, at the pleading stage, “the plaintiff
has no evidentiary burden,” id., and the court accepts as true “all material allegations of the
complaint and construe[s] the complaint in favor of the complaining party.” Cortlandt Street, 790
F.3d at 417 (citations, quotation marks, and alterations omitted).
B.

Discussion

Defendants aver that the Amended Complaint fails to allege sufficient facts to establish
that they were his employers under the relevant state and federal labor laws. Accordingly,
Defendants’ motion is facial so Hong has no evidentiary burden. Lujan, 504 U.S. at 561. The
Amended Complaint clearly alleges that Hong has suffered an injury (non-payment of statutorily
required wages) traceable to conduct of his employers and redressable by an award in his favor.
That gives him standing to sue entities or persons alleged to have been his employers for relief
under the FLSA and NYLL. See 29 U.S.C. § 216(b) (“An action to recover the liability prescribed
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. . . may be maintained against any employer . . . in any Federal or State court of competent
jurisdiction by any one or more employees[.]”).
Whether Defendants were Hong’s employers—as that term is defined by FLSA—during
some or all of the period covered by the Amended Complaint is not a jurisdictional question. That
question goes to the merits. It concerns “the existence of a fact . . . that Congress has specified as
a prerequisite for the application of a federal statute.” Da Silva v. Kinsho Intern. Corp., 229 F.3d
358, 363 (2d Cir. 2000); cf. id. at 366 (“[T]he threshold number of employees for application of
Title VII is not a jurisdictional issue, at least as long as a plaintiff, as in the pending case, makes a
non-frivolous claim that the defendant is a covered employer.”). “Where the asserted basis for
subject matter jurisdiction is also an element of the plaintiff’s allegedly federal cause of action, we
ask only whether—on its face—the complaint is drawn so as to seek recovery under Federal Law
or the Constitution.” Id. at 364. If the face of the complaint seeks relief under federal law or the
Constitution, then the Court must “find a sufficient basis for jurisdiction[] and reserve further
scrutiny for an inquiry on the merits.” Id. at 364.
Here, the Amended Complaint alleges that Defendants were Hong’s employers and, as
such, were responsible for the failure to pay him legally required wages. Whether the facts pled
adequately support that Defendants were Hong’s employers within the meaning of the FLSA is
properly addressed under Rule 12(b)(6). Hsieh Liang Yeh v. Han Dynasty, Inc., No. 18 CIV. 6018
(PAE), 2019 WL 633355, at *4 (S.D.N.Y. Feb. 14, 2019) (citing Bleiler v. Cristwood Constr., Inc.,
72 F.3d 13 (2d Cir. 1995) (holding district court erred in dismissal of an ERISA claim under Rule
12(b)(1) for failing to allege adequately that defendant was an employer within the statutory
definition where case should have been dismissed under Rule 12(b)(6))).
The Court, therefore, denies Defendants’ Rule 12(b)(1) motion.
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II.

Defendants’ Rule 12(b)(6) Motion
Defendants also assert that dismissal is required under Rule 12(b)(6) for failure to state a

plausible claim. Specifically, they aver that they are not “employers” within the meaning of
FLSA and the NYLL and, further, that Plaintiff has failed to plausibly plead wage-and-hour and
recordkeeping violations under either the FLSA or NYLL.
A.

Applicable Legal Standard

Under Federal Rule of Civil Procedure 12(b)(6) (“Rule 12(b)(6)”), a court must determine
whether the complaint “contain[s] sufficient factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The Court must take all material factual allegations
as true and draw reasonable inferences in the non-moving party’s favor, but the Court is “not bound
to accept as true a legal conclusion couched as a factual allegation,” or to credit “mere conclusory
statements” or “[t]hreadbare recitals of the elements of a cause of action.” Id. (quoting Twombly,
550 U.S. at 555). A claim is facially plausible when the factual content pleaded allows a court “to
draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678.
Generally, “[i]n adjudicating a Rule 12(b)(6) motion, a district court must confine its consideration
to facts stated on the face of the complaint, in documents appended to the complaint or
incorporated in the complaint by reference, and to matters of which judicial notice may be taken.”
Leonard F. v. Isr. Disc. Bank of N.Y., 199 F.3d 99, 107 (2d Cir. 1999) (internal quotation marks
and citation omitted).

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B.

Discussion
1.

Whether any Defendant is Plaintiff’s “Employer”

Defendants assert that Hong has failed to allege that any of the Defendants were his
“employer” as that term is statutorily defined.
a)

Definition of “Employer”

The FLSA defines “employer” as “any person acting directly or indirectly in the interest of
an employer in relation to an employee.” 29 U.S.C. § 203(d). “The Supreme Court has emphasized
that is an expansive definition with ‘striking breadth.’” Hart v. Rick’s Cabaret Intern., Inc., 967 F.
Supp. 2d 901, 938-39 (S.D.N.Y. 2013) (quoting Nationwide Mut. Ins. Co. v. Darden, 503 U.S.
318, 326 (1992)). The “overarching concern is whether the alleged employer possessed the power
to control the workers in question.” Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132, 139 (2d Cir.
1999) (citation omitted). In order for an individual defendant to be an employer, there must be
more than just “[e]vidence that [the] individual is an owner or officer of a company, or otherwise
makes corporate decisions that have nothing to do with an employee’s function . . . . Instead, to be
an ‘employer,’ an individual defendant must possess control over a company’s actual ‘operations’
in a manner that relates to a plaintiff’s employment.” Irizarry v. Catsimatidis, 722 F.3d 99, 109
(2d Cir. 2013). “[T]he determination of whether an employer-employee relationship exists for
purposes of the FLSA should be grounded in economic reality rather than technical concepts.” Id.
at 104 (citation and internal quotation marks omitted).
The NYLL’s definition of “employer” is “nearly identical” to that of the FLSA, and the
analysis of the employment relationship under both statutes is based on the same factors. See
Fermin v. Las Delicias Peruanas Restaurant, Inc., 93 F. Supp. 3d 19, 37 (E.D.N.Y. 2015);
Copantitla v. Fiskardo Estiatorio, Inc., 788 F. Supp. 2d 253, 308 n.21 (S.D.N.Y. 2011); see also
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Mahoney v. Amekk Corp., No. 14-CV-4131, 2016 WL 6585810, at *9 (E.D.N.Y. Sept. 30, 2016)
(collecting cases holding that the FLSA and NYLL are interpreted consistently with one another
on the question of employer status).
In addition, “[a]n individual may simultaneously have multiple ‘employers’ for the
purposes of the FLSA, in which case, ‘all joint employers are responsible, both individually and
jointly, for compliance with all the applicable provisions of the [FLSA].’” Olvera v. Bareburger
Grp. LLC, 73 F. Supp. 3d 201, 204-05 (S.D.N.Y. 2014) (citing 29 C.F.R. § 791.2(a)).
The Second Circuit has identified several sets of factors relevant to the economic reality
inquiry. In its narrowest form, this analysis evaluates whether an alleged employer exercised
formal control, and at its broadest it evaluates functional control. Accordingly, “the exercise of
formal control over employees is sufficient, but not necessary, to adequately allege an employer
relationship.” Xiaoyan Liu v. Canteen 82 Inc., No. 17 Civ. 7862 (KPF), 2018 WL 6067228, at *5
(S.D.N.Y. Nov. 20, 2018) (quoting Carter v. Dutchess Cmty. Coll., 735 F.2d 8, 12 (2d Cir. 1984)).
(1)

Individual Officer Control over Plaintiff

When evaluating formal control, courts consider: “whether the alleged employer (1) had
the power to hire and fire the employees, (2) supervised and controlled employee work schedules
or conditions of employment, (3) determined the rate and method of payment, and (4) maintained
employment records.” Carter, 735 F.2d at 12 (quoting Bonnette v. Calif. Health & Welfare Agency,
704 F.2d 1465, 1470 (9th Cir. 1983)). “Formal control does not require continuous monitoring of
employees, looking over their shoulders at all times, or any sort of absolute control of one’s
employees.” Hart v. Rick’s Cabaret Int’l, Inc., 967 F. Supp. 2d 901, 939 (S.D.N.Y. 2013) (citing
Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132, 139 (2d Cir. 1999)) (internal quotation marks
omitted). However, it does “require some degree of individual involvement in a company in a
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manner that affects employment-related factors such as workplace conditions and operations,
personnel, or compensation—even if this appears to establish a higher threshold for individual
liability than for corporate ‘employer’ status.” Irizarry v. Catsimatidis, 722 F.3d 99, 109 (2d Cir.
2013). An allegation that an “individual is an owner or officer of a company, or otherwise makes
corporate decisions that have nothing to do with an employee’s function, is insufficient to
demonstrate ‘employer’ status.” Id. (discussing n Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132,
139 (2d Cir. 1999)).
(2)

Corporations as Single Integrated Enterprises

In the context of affiliated entities within a corporate family, courts in this District have
sometimes applied another test: the single-integrated-enterprise test. See, e.g., In re Domino’s
Pizza Inc., No. 16 Civ. 6274 (AJN), 2018 WL 1587593, at *2 (S.D.N.Y. Mar. 27, 2018)
(acknowledging availability of single-integrated-enterprise test under FLSA); Juarez v. 449 Rest.,
Inc., 29 F. Supp. 3d 363, 368 n.3 (S.D.N.Y. 2014) (applying single-integrated-enterprise test, while
noting that defendants never challenged the application of the test); Lopez v. Pio Pio NYC, Inc.,
No. 13 Civ. 440 (HB), 2014 WL 1979930, at *3 (S.D.N.Y. May 15, 2014) (“[T]he shared policy
concerns underlying the . . . doctrine and the FLSA urge the theory’s application to FLSA claims.”)
(internal quotation marks and citations omitted). Under this test, courts consider the following
factors: “(1) interrelated operations, (2) common management, (3) centralized control of labor
relations, and (4) common ownership.” Chen v. TYT E. Corp., No. 10 Civ. 5288 (PAC), 2012 WL
5871617, at *3 (S.D.N.Y. Mar. 21, 2012) (quoting Murray v. Miner, 74 F.3d 402, 404 (2d Cir.
1996)).

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b)

Analysis
(1)

Individual Defendants

Plaintiff makes specific factual allegations regarding Defendant Lee including that Plaintiff
knew him as “Boss,” and that Lee authorized a Delivery Head to hire Plaintiff, a Telephone
Attendant to pay Plaintiff, and directed a Manager to fire Plaintiff. These specific factual
allegations regarding Lee’s control over Hong’s work as a deliveryman, are sufficient to deem Lee
an employer under the FLSA and NYLL.
However, the Amended Complaint is devoid of any factual allegations tying the other
Individual Defendants to “plaintiff’s employment” and mere allegations that an “individual is an
owner or officer of a company, or otherwise makes corporate decisions that have nothing to do
with an employee’s function” are insufficient to state a claim. Irizarry, 722 F.3d at 109; accord
Han Dynasty, 2019 WL 633355, at *7 (“the allegation that some . . . held ownership positions does
not by itself make them Yeh’s employer”). Additionally, “bare recitation of the legal standard,
unsupported by concrete factual allegations, is inadequate to plead that a given individual was an
‘employer’ of a plaintiff.” Id. Accordingly, the Court must dismiss the claims against Defendants
Diana, Chang, and Zhang.
(2)

Corporate Defendants

Plaintiff alleges that he was employed to work as a deliveryman in White Plains. (AC at
¶ 7). He further alleges that Corporate Defendants HAIKU @ WP INC. and JP WHITE PLAINS
INC. do business as Haiku Asian Bistro White Plains. (AC at ¶¶ 8, 11.) Accordingly, he has stated
a claim against the Corporate Defendants who conduct business as Haiku Asian Bistro White
Plains.

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However, despite Plaintiff’s cursory allegations that “the work performed by Plaintiff was
directly essential to the business operated by . . . Haiku Asian Bistro White Plains” and “Haiku
Asian Bistro Bronxville” (AC at ¶ 34), the Amended Complaint merely states that Hong was
employed to work as a deliveryman at “149 Mamaroneck Avenue, White Plains, NY 10601” (AC
at ¶ 37) and does not allege that he reported to, delivered for, or had any contact with any location
other than Haiku White Plains. Accordingly, he has not asserted sufficient facts tying his work at
the White Plains location to any of the other Haiku establishments.
Even assuming that the various Haiku locations shared a website or otherwise operated as
a single brand, “the decisive factor as to whether a named defendant is responsible for FLSA
violations as to a particular plaintiff turns on control[.]” Han Dynasty, 2019 WL 633355, at *8.
Courts must dismiss complaints “against defendants within a broader alleged enterprise that lack
a nexus suggesting control of the plaintiff at hand: for example, where the plaintiff fails to “allege
that [he] worked at the [other locations in the enterprise], that [he] transferred items between those
stores, or that [he] communicated with anyone at those stores.” Id. (quoting In re Domino’s Pizza
Inc., 2018 WL 1587593, at *3.) Accordingly, the Court must dismiss the claims against Corporate
Defendants JP BRONXVILLE and JP SCARSDALE, which Hong alleges do business as Haiku
Asian Bistro Bronxville and Scarsdale, respectively, because Plaintiff has not alleged that he ever
interacted with, worked for, or was controlled by the Bronxville or Scarsdale locations.

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2.

Substantive Challenges

Defendants have also moved to dismiss various counts of the Amended Complaint for
failure to plausibly allege wage-and-hour and recordkeeping violations under the FLSA and
NYLL. 1 The Court examines these claims in turn.
a)

Wage-and-Hour

Various counts of the Amended Complaint assert that because Defendants failed to pay
overtime, to reimburse Hong for mileage, and deducted certain amounts for cash tips, meals, and
transportation, his effective wage was below the federal and state minimums. (AC Counts I, II, III,
IV, V, VI, VII, VIII, XIII). 2
The FLSA and the NYLL both “guarantee[ ] compensation for all work . . . engaged in by
[covered] employees.” Kuebel v. Black & Decker Inc., 643 F.3d 352, 359 (2d Cir.2011) (internal
quotation marks, citation, and brackets omitted). In particular, an employee must be paid at least
minimum wage. 29 U.S.C. § 206(a); N.Y. Lab. Law § 652(1). “[F]or any hours worked in excess
of forty per week,” the employee must “be compensated at a rate of no less than one and one-half
times the regular rate of pay.” Nakahata v. New York–Presbyterian Healthcare Sys., Inc., 723 F.3d
192, 200 (2d Cir. 2013); see 29 U.S.C. § 207(a)(1); N.Y.C.C.R.R. tit. 12, § 146-1.4. During the
relevant period, the federal minimum wage was $7.25 per hour, 29 U.S.C. § 205(a), and the New
York minimum wage was higher than the federal minimum wage at all relevant times.

1

Defendants also moved to dismiss counts IX and X. Since Hong has abandoned these
counts (Opp’n Mem. at 17) the Court need not address them.
2
Defendants further aver that the Court should dismiss Counts II and III because their
headings appear to have been swapped such that the heading for Count II (“Violation of 29 U.S.C.
§ 203(m) and (t)—Illegal Retention of Tips”) matches paragraphs 91-93 describing unlawful tip
retention under the FLSA, and the heading for Count III (“Violation of NYCRR—Meal Credit
Violation”) matches paragraphs 81-90 describing meal credits. Despite the typographical error, the
Court will consider the sufficiency of these counts.
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NYLL Section 193 “proscribes most deductions from the ‘wages’ of employees.’” Pachter
v. Bernard Hodes Group, Inc., 541 F.3d 461, 463 (2d Cir. 2008). Under the statute, “[o]nce wages
are earned, ‘deductions other than those set forth in section 193 are improper.’” Jankousky v. N.
Fork Bancorporation, Inc., No. 08-cv-1858, 2011 WL 1118602, at *3-4 (S.D.N.Y. Mar. 23, 2011)
(quoting Patcher v. Bernard Hodes Grp., Inc., 891 N.E.2d 279, 284-86 (N.Y. 2008)). In other
words, NYLL prohibits direct deductions—it does not apply to claims of failure to reimburse. See
Bondoc v. Skylar, No. 152178/2015, 2017 N.Y. Slip Op. 30058(U) (N.Y. Sup. Ct. N.Y. Cnty. Jan.
12, 2017) (“A failure to reimburse is not a deduction.”).
“[U]nder New York law, employers do not have to reimburse employees for business
expenses . . . so long as not doing so does not reduce the employee’s wage below the minimum
wage.” Oram v. SoulCycle LLC, 979 F. Supp. 2d 498, 507 (S.D.N.Y. 2013) (citation omitted); see
also Lin v. Benihana Nat’l Corp., 755 F. Supp. 2d 504, 511-12 (S.D.N.Y. 2010) (collecting cases).
Courts have likewise interpreted the FLSA to only “prohibit[ ] employers from requiring
employees to purchase the tools of their trade or give any money back to their employers, when
the cost of such tools purchased by the employee cuts into the minimum or overtime wages
required to be paid him under the Act.” Jiaren Wei v. Lingtou Zhengs Corp., No. 13-cv-5164, 2015
WL 739943, at *13 (E.D.N.Y. Feb. 20, 2015) (internal quotation marks and citation omitted). In
sum, the FLSA and NYLL merely prohibit certain deductions and do not require credit or
reimbursement unless failure to credit or reimburse would bring an employee’s effective rate
below the statutory minimum wage.
The Amended Complaint alleges that until December 2017, Hong worked an average of
58.5 hours per week (id. at ¶¶ 38-40) and was paid $7.50 per hour (id. at ¶ 46), and that from
January 2018 to May 2018, he worked an average of 50.5 hours per week (id. at ¶¶ 41-43) and was
14

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paid $9.15 per hour (id at ¶ 47). By asking the Court to take the aforementioned as an admission
by Hong that he was at all times earning above the minimum wage, Defendants ignore Hong’s
allegations that throughout his employment his pay was subject to various deductions—$10 per
week in cash tips, $20-$25 per week for meals, and $24 per week for transportation (Id. at ¶ 50)—
and that under both federal and New York labor law, any hours per week in excess of forty must
be compensated at 1.5 times the normal hourly rate, which, together Plaintiff estimates brought his
effective rate below the minimum requirements. 3 Accordingly, the Court finds that Hong has
plausibly alleged that his effective wage was below the federal and state minimums during at least
a portion of the period covered by the Amended Complaint.
b)

Recordkeeping

NYLL requires that, at the time of hiring, employers provide their employees a written
notice with the following information: (1) the rate or rates of pay and basis thereof; (2) allowances,
if any, claimed as part of the minimum wage, including tip, meal, or lodging allowances; (3) the
regular pay day designated by the employer; (4) the employer’s name; (5) any “doing business as”
names used by the employer; (6) the physical address of the employer’s main office or principal
place of business, and a mailing address if different; (7) the employer’s telephone number; and
(8) such other information as the commissioner deems material and necessary. N.Y. Lab. Law
§ 195(1)(a). Employers must provide this notice “in English and in the language identified by each
employee as the primary language of such employee.” Id. “Further, employers must furnish each

3

Hong further alleges that for an unspecified period of five months, he served as the
transportation van driver and was compensated in this role $5 for forty to sixty minutes of nontipped work. (Id. at ¶ 51.) While Hong fails to specify approximately how many hours per week
were compensated in this manner and whether this 5-month period occurred prior to or after
December 2017, such work could only further depress the average effective rate.
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employee with a statement with every payment of wages, listing the following information: (1) the
dates of work covered by that payment of wages; (2) the employee’s name; (3) the employer’s
name, address, and telephone number; (4) the rate or rates of pay and basis thereof; (5) gross
wages; (6) deductions; (7) allowances, if any, claimed as part of the minimum wage; and (8) net
wages. N.Y. Lab. Law § 195(3). There is no language requirement for the statements required
under Section 195(3). Section 198 provides a private right of action for violations of both Section
195(1) and 195(3). N.Y. Lab. Law § 198-1b and 1d.
Further, employers must notify Plaintiffs of FLSA “§ 203(m)’s tip-credit provision, and
the Court must strictly construe this requirement against Defendants.” Gamero v. Koodo Sushi
Corp., 272 F. Supp. 3d 481, 505 (S.D.N.Y. 2017), aff’d, 752 F. App’x 33 (2d Cir. 2018). In other
words, an employer must provide a plaintiff with “written notice of the” tip credit in English and
the employee’s native language, and obtain a signed acknowledgement from each plaintiff and
retain such acknowledgement for six years. Gamero, 272 F. Supp. 3d at 505 (quoting 12
N.Y.C.R.R. § 146–2.2(a), (c))
The Amended Complaint alleges that Hong did not receive any of the requisite notices.
Accordingly, he has plausibly alleged recordkeeping violations under the FLSA and NYLL.
CONCLUSION
For the foregoing reasons, Defendants’ Motion to dismiss the Amended Complaint is
GRANTED in part and DENIED in part. The Court dismisses with prejudice claims against JP
Bronxville, JP Scarsdale, Pietro Diana, Hsingya Chang, and Jie Zhang. The claims against
defendant Lee, JP White Plains and Haiku @ WP for wage-and-hour and recordkeeping violations
under the FLSA and NYLL remain.

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Accordingly, Defendants Lee, JP White Plains and Haiku @ WP are directed to answer the
remaining portions of the Amended Complaint by May 5, 2021, and the parties are directed to file
a completed Case Management Plan and Scheduling Order on the docket (template attached) by
May 19, 2021.
The Clerk of the Court is respectfully directed to (1) terminate the motion at ECF No. 33,
and (2) terminate JP Bronxville, JP Scarsdale, Pietro Diana, Hsingya Chang, and Jie Zhang as
Defendants.
Dated:

March 31, 2021
White Plains, New York

SO ORDERED:

________________________________
NELSON S. ROMÁN
United States District Judge

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Case 7:19-cv-05018-NSR Document 38 Filed 03/31/21 Page 18 of 19

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------------------------------x

Plaintiff(s),

Rev. May 2014

CIVIL CASE DISCOVERY PLAN
AND SCHEDULING ORDER

- against -

Defendant(s).

CV

(NSR)

-------------------------------------------------------------x
This Civil Case Discovery Plan and Scheduling Order is adopted, after consultation with
counsel, pursuant to Fed. R. Civ. P. 16 and 26(f):
1.

All parties [consent] [do not consent] to conducting all further proceedings before
a Magistrate Judge, including motions and trial, pursuant to 28 U.S.C. § 636(c).
The parties are free to withhold consent without adverse substantive consequences.
(If all parties consent, the remaining paragraphs of this form need not be
completed.)

2.

This case [is] [is not] to be tried to a jury.

3.

Joinder of additional parties must be accomplished by ______________________.

4.

Amended pleadings may be filed until _____________________. Any party
seeking to amend its pleadings after that date must seek leave of court via motion.

5.

Interrogatories shall be served no later than ___________________, and responses
thereto shall be served within thirty (30) days thereafter. The provisions of Local
Civil Rule 33.3 [shall] [shall not] apply to this case.

6.

First request for production of documents, if any, shall be served no later than
____________________.

7.

Non-expert depositions shall be completed by ____________________________.
a.

Unless counsel agree otherwise or the Court so orders, depositions shall not
be held until all parties have responded to any first requests for production
of documents.

b.

Depositions shall proceed concurrently.

c.

Whenever possible, unless counsel agree otherwise or the Court so orders,

Case 7:19-cv-05018-NSR Document 38 Filed 03/31/21 Page 19 of 19

non-party depositions shall follow party depositions.
8.

Any further interrogatories, including expert interrogatories, shall be served no
later than _______________________.

9.

Requests to Admit, if any, shall be served no later than
______________________.

10.

Expert reports shall be served no later than ______________________.

11.

Rebuttal expert reports shall be served no later than ______________________.

12.

Expert depositions shall be completed by ______________________.

13.

Additional provisions agreed upon by counsel are attached hereto and made a part
hereof.

14.

ALL DISCOVERY SHALL BE COMPLETED BY ______________________.

15.

Any motions shall be filed in accordance with the Court’s Individual Practices.

16.

This Civil Case Discovery Plan and Scheduling Order may not be changed without
leave of Court (or the assigned Magistrate Judge acting under a specific order of
reference).

17.

The Magistrate Judge assigned to this case is the Hon.

18.

If, after entry of this Order, the parties consent to trial before a Magistrate Judge,
the Magistrate Judge will schedule a date certain for trial and will, if necessary,
amend this Order consistent therewith.

19.

The next case management conference is scheduled for _____________________,
at ____________. (The Court will set this date at the initial conference.)

.

SO ORDERED.
Dated: White Plains, New York
_______________________

Nelson S. Román, U.S. District Judge