Opinion
21-CV-11101 (RA) (KHP)
05-17-2023
SHU JUAN LIU, Plaintiff, v. FIVE STARS BEAUTY SPA, INC. et al., Defendants.
REPORT AND RECOMMENDATION
KATHARINE H. PARKER UNITED STATES MAGISTRATE JUDGE
TO: THE HONORABLE RONNIE ABRAMS, UNITED STATES DISTRICT JUDGE FROM: KATHARINE H. PARKER, UNITED STATES MAGISTRATE JUDGE.
Plaintiff is a former employee of Defendant Five Stars Beauty Spa, Inc. She asserts claims against the Spa and its owners, Individual Defendants Shenhua Wang and Xia Zhou, under the Fair Labor Standards Act (“FLSA”) 29 U.S.C. § 201(d) et seq., the New York Labor Law §§ 190 et seq. for failure to pay minimum wage, overtime, and spread of hours; failure to provide meal periods; failure to keep records; failure to provide new hire notices; failure to provide wage statements; and attorneys' fees and costs. After entry of default against Defendants, the Honorable Ronnie Abrams referred this action to me for a report and recommendation on damages. Since no class or collective was ever certified, the motion seeks damages only with respect to Plaintiff. After review of the submissions, I respectfully recommend that Plaintiff be awarded damages as set forth in detail below.
FACTUAL AND PROCEDURAL BACKGROUND
The facts and background are taken from the Complaint.
Plaintiff was employed as a beauty spa worker at Five Stars Beauty Spa from July 1, 2017 to March 31, 2020. (Compl. ¶ 7.)
The Individual Defendants are officers, directors, managers and/or majority shareholders or owners of Five Stars Beauty. (Id. at ¶ 12.) Shenhua Wang had the power to hire and fire employees, supervised and controlled employee work schedules or conditions of employment, determined the rate and method of payment, and maintained employee records. (Id. at ¶ 13.) Xia Zhou hired and fired Plaintiff, supervised and controlled employee work schedules or conditions of employment, determined the rate and method of pay, and maintained employee records. (Id. at ¶¶ 14, 16.)
During Plaintiff's employment, Plaintiff worked from 10:30 a.m. to 1:00 a.m. six days a week, which totals 14.5 hours a day and 87 hours a week and was paid a flat compensation at $2,000 per month. (Id. at ¶¶ 32, 34.) Plaintiff also did not have a fixed time for lunch or dinner.
Defendants did not provide any documentation regarding pay rates or preserve relevant wage records. Plaintiff was not informed in writing of her hourly pay rate or overtime rate. (Id. at ¶¶ 36-37.)
Plaintiff submitted a sworn affirmation in connection with her motion for a default judgment and damages. (Liu Aff. ECF No. 21-2.) Plaintiff provided her employment information such as position held and duration. (Id.) Plaintiff attested that she regularly worked in excess of forty hours per week, and more than ten hours in one day, and that the Defendants failed to pay her the proper amount of minimum wage, overtime and spread of hours wages. (Id.) In particular, she states that she worked six days a week with Thursdays being her day off. She states she worked 14.5 hours per day and 87 hours per week during her employment (July 1, 2017 to March 31, 2020). Plaintiff attests she was paid a flat rate of $2,000 per month and that Defendants employed more than eleven employees. (Id.) Plaintiff further attests that she did not have a fixed time for lunch or for dinner, did not receive any wage notice, and did not receive paystubs. Consequently, Plaintiff seeks unpaid minimum wage, overtime wages, spread of hours wages, liquidated damages, pre-judgment interest, post-judgment interest, and statutory damages. The details of the work performed, and amounts claimed are discussed below.
PROCEDURAL HISTORY
Plaintiff commenced this action on December 29, 2021. (ECF No. 4.) Plaintiff served the Summons and Complaint on all Defendants at their place of business. (ECF Nos. 6-8.) Defendants failed to appear or respond to Plaintiff at any time during this case. At the inquest hearing, Plaintiff's counsel informed the Court that Defendants were aware of this suit because they asked Plaintiff to drop it. Thus, Defendants had notice of this suit and deliberately failed to participate and answer the complaint.
On April 25, 2022, Plaintiff requested Certificates of Default from the Clerk of the Court for all Defendants. (ECF No. 13, 16.) On April 25, 2022, the Clerk of the Court entered a certificate of default against each Defendant. (ECF Nos. 17.) On June 2, 2022, Plaintiff filed a motion for default judgment as to all Defendants. (ECF No. 20.) On February 9, 2023, the Honorable Ronnie Abrams ordered the Defendants to show cause explaining why a default judgment is not warranted at the hearing held on February 23, 2023. (ECF No. 24, 27.) On February 23, 2023, Judge Abrams held a default judgment hearing. Defendants failed to attend. Accordingly, Judge Abrams granted Plaintiff's motion for default against Defendants. (ECF No. 27.) On the same day, Judge Abrams referred the matter to the undersigned for an inquest on damages. (ECF No. 28.) On May 8, 2023, the undersigned held an inquest hearing. Defendants were provided notice (ECF No. 30) and failed to appear. The following recommendations are based on the facts asserted in the Complaint, as well as evidence presented in Plaintiffs' declarations and moving papers and at the hearing. (ECF Nos. 20-22, 29, 31.)
DISCUSSION
I. Default Judgment
Federal Rule of Civil Procedure (“Rule”) 55 governs judgments against a party that has failed to plead or otherwise defend itself in an action. Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61 (2d Cir. 1981) (defendant's ongoing failure to appear supported failure to plead for the purpose of entry of default). Rule 55 requires a two-step process for an entry of a default judgement. Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993). First, upon notification from the moving party, the court clerk enters a certificate of default against the party who failed to defend. Priestley v. Headminder, Inc., 647 F.3d 497, 505 (2d Cir. 2011) (citing Fed.R.Civ.P. 55(a)). Second, once the clerk issues a certificate of default, the moving party may apply for entry of default judgment pursuant to Rule 55(b). Id. A default constitutes an admission of all well-pleaded factual allegations in the complaint, and the allegations as they pertain to liability are deemed true. Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). However, plaintiffs are not entitled to a default judgment as a matter of right merely because the opposing party is in default. Finkel v. Universal Elec. Corp., 970 F.Supp.2d 108, 118 (E.D.N.Y. 2013). Plaintiffs bear the burden to demonstrate that their uncontroverted allegations in the complaint, without more, establish the defendant's liability on each asserted cause of action. La Barbera v. Fed. Metal & Glass Corp., 666 F.Supp.2d 341, 348 (E.D.N.Y. 2009).
To determine whether a motion for default judgment is warranted, courts within this district consider three factors: (1) whether the defendant's default was willful; (2) whether the defendant has a meritorious defense to plaintiff's claims; and (3) the level of prejudice the nondefaulting party would suffer as a result of the denial of the motion for default judgment. Guggenheim Capital, LLC v. Birnbaum, 722 F.3d 444, 455 (2d Cir. 2013) (applying these factors in review of lower court's grant of a default judgment).
Here, Plaintiff has satisfied the two-step procedural requirements of Rule 55. (ECF Nos. 13, 16-17.) Additionally, all three of the default judgment factors weigh in Plaintiff's favor. The Defendants' failure to appear and respond to either Plaintiff's Complaint or Motion for a Default Judgment are indicative of willful conduct. Am. All. Ins. Co. v. Eagle Ins. Co., 92 F.3d 57, 60 (2d Cir. 1996) (explaining that Second Circuit courts look for evidence of bad faith or more than mere negligence to satisfy the willfulness standard). The Defendants cannot assert any meritorious defenses to Plaintiff's claims because they failed to respond or make any appearance in this case. Fermin v. Las Delicias Peruanas Res., Inc., 93 F.Supp.3d 19, 31 (E.D.N.Y 2015) (reasoning that a meritorious defense cannot be established where the defendant has not filed an answer, made an appearance, and responded to the claims in the case). Thirdly, Plaintiff will be prejudiced if denied the ability to seek judgment by default because she will have no alternative legal redress to recover the amounts due to her for the work performed during her employment. World Gold Tr. Servs., LLC v. GoldCoin Devs. Grp. LP, 2021 WL 4134681, at *2 (S.D.N.Y. Sept. 10, 2021) (finding that the plaintiff would be prejudiced if denied the ability to seek judgment because plaintiff had no alternative legal redress to obtain damages or injunctive relief).
As noted above, a defendant's default is an admission of the plaintiff's well-pleaded allegations as to liability but not for purposes of determining damages. See Greyhound Exhibitgroup, 973 F.2d at 158 (2d Cir. 1992). Even when a defendant has defaulted, however, a substantive analysis of the alleged claims is required to determine whether the plaintiff may be awarded damages, and proof of damages is required. Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974). Below I both liability for the claims asserted and damages.
II. Minimum Wage, Overtime, and Spread of Hours Under the FLSA and NYLL
The FLSA was enacted by Congress to “protect all covered workers from substandard wages and oppressive working hours, ‘labor conditions [that are] detrimental to the maintenance of the minimum standard of living necessary for the health, efficiency and general well-being of workers.'” Barrentine v. Arkansas-Best Freight Sys. Inc., 450 U.S. 728, 739, 101 S. C.t 1437, 67 L.Ed.2d 641 (1981) (quoting 29 U.S.C. § 202(a)). To establish a claim under the FLSA, a plaintiff must show that: (1) she was an “employee” of the defendants, as defined by the statute; (2) that the defendants were employers engaged in commerce; and (3) that the employment relationship was not exempt from the FLSA. See Dejesus v. HF Mgmt. Servs., LLC, 72 6 F.3d 85, 90 (2d Cir. 2013) (plaintiff alleged facts about employment status and duties to satisfy FLSA claim).
Section 206 of the FLSA sets forth the minimum hourly wage that employers must pay their employees. Id.; 29 U.S.C. § 206(a)(1)(C). Section 207 specifies that an employer must pay employees who work more than forty hours during a workweek for the excess hours “at a rate not less than one and one-half times the regular rate at which [they are] employed.” 29 U.S.C. § 207(a)(1). There is a presumption that an employee is entitled to overtime; an employer bears the burden of proving that an employee is exempt from overtime. 29 USC § 207(a)(1); Bilyou v. Dutchess Beer Distributors, Inc., 300 F.3d 217, 222 (2d Cir. 2002) (recognizing that exempt status under the FLSA is an affirmative defense). Employers who violate the FLSA's minimum wage and overtime provisions are liable for the amount of unpaid wages and an additional equal amount as liquidated damages. 29 USC § 216(b).
New York's Labor law is the state analogue to the FLSA. Although the New York Labor Law “does not require a plaintiff to show either a nexus with interstate commerce or that the employer has any minimum amount of sales,” it otherwise follow the FLSA in requiring a minimum wage and overtime. Ramos v. Baldor Specialty Foods, Inc., 687 F.3d 554, 556 (2d Cir. 2012). The New York Labor Law also provides that employees are entitled to recover liquidated damages at a rate of 100 percent of the wages due. See N.Y. Lab. Law § 198(3); Chun Jie Yin v. Kim, 2008 WL 906736, at *6 (E.D.N.Y. Apr. 1, 2008); Jowers v. DME Interactive Holdings, Inc., 2006 WL 1408671, at *9 (S.D.N.Y. May 22, 2006).
New York's minimum wage was at all relevant times higher than the federal minimum wage. See 29 U.S.C. § 206(a)(1), 207(a)(1); Art. 19 NYLL Sec. 652; Dept. of Lab. New York City Minimum Wage rates at https://dol.ny.gov/minimum-wage-0 (last visited Nov. 2, 2021). Under applicable law, Plaintiff is entitled to the more generous minimum wage and overtime rates during all relevant periods. See, e.g., Elisama v. Ghzali Gourmet Deli Inc., 2016 WL 11523365, at *11 (S.D.N.Y. Nov. 7, 2016) (applying NYLL's six-year statute of limitations because it provided the greatest measure of relief), adopted by 2018 WL 4908106 (S.D.N.Y. Oct. 10, 2018); Gamero v. Koodo Sushi Corp., 272 F.Supp.3d 481, 498, 515-16 (S.D.N.Y. 2017) (same), aff'd, 752 Fed.Appx. 33 (2d Cir. 2018).
The federal minimum wage during Plaintiffs' employment was $7.25. 29 U.S.C. § 206(a)(1). The federal overtime rate is 1.5 x the employee's regular hourly rate. 29 U.S.C. § 207(a)(1). In New York City, the minimum wage for employees with 11 employees or more was $11 an hour until December 30, 2017, $13 an hour from December 31, 2017 to December 30, 2018, and $15 per hour on and after December 31, 2018. Art. 19 NYLL Sec. 652. The New York State overtime rate also is 1.5 times the regular rate. Plaintiff attests there were at least 11 employees at the Spa. (Liu Aff ¶ 6. ECF No. 21-2.)
Here, Plaintiff attested that Defendants were her employer and that she was employed by Defendants. (Liu Aff. ECF No. 21-2.) She asserts that Defendants hired and fired her, supervised and controlled her work schedule, and determined the rate and method of compensation in exchange for her work. Thus, Plaintiff has met the requirement of demonstrating that Defendants were employers and that she was an employee. See Rahman v. Red Chili Indian Cafe, Inc., 2021 WL 2003111 (S.D.N.Y. May 19, 2021) (in default judgment context, finding allegations in complaint that restaurant and its owner had the power to hire and fire employees and set wages was sufficient to establish that both the entity and its owners were employers under the FLSA); see also 29 U.S.C. § 203(d, e); NYLL 190(2, 3); Irizarry v. Catsimatidis, 722 F.3d 99, 104-11 (2d Cir. 2013) (An “employer” may include an individual owner who exercises sufficient operational control over employees).
Moreover, Plaintiff has satisfied the employer revenue threshold and interstate commerce requirements for coverage under the FLSA. Plaintiff alleged the Spa is an enterprise engaged in commerce or in the production of goods for commerce within the meaning of the FLSA, and that its annual gross revenue was in excess of $500,000 as required by 29 U.S.C. § 203(s)(1)(A)(i)-(ii). (See Compl. ¶¶ 10-11.) This is sufficient to demonstrate coverage of the claims under the FLSA. Rahman, 2021 WL 2003111 (S.D.N.Y. May 19, 2021); Pelgrift v. 335 W. 41st Tavern Inc., 2017 WL 4712482, at *7 (S.D.N.Y. Sept. 28, 2017) (finding a complaint merely restating the statutory definition sufficient given reasonable inferences); Fermin, 93 F.Supp.3d at 33.
The FLSA exempts certain employees from minimum wage and overtime wage protections. Given the presumption that an employee is entitled to overtime and Defendants' failure to appear and meet their burden that Plaintiff falls under a specific exemption, Plaintiff has satisfied her entitlement to unpaid wages, including overtime, under the FLSA. Because the analysis under New York law is the same, Plaintiff also has satisfied her burden in demonstrating Defendants' exposure to liability under the New York Labor law. Debejian v. Atl. Testing Labs., Ltd., 64 F.Supp.2d 85, 87, n. 1 (N.D.N.Y. 1999) (finding New York Labor Law provisions “substantially similar to the federal scheme” such that its analysis of federal law would apply equally to claims brought under the FLSA and New York law).
Under the FLSA, claims are subject to a two-year statute of limitations if the violation is not willful and a three-year statute of limitations if the violation is willful. See Pineda v. Masonry Const. Inc., 831 F.Supp.2d 666, 674 (S.D.N.Y. 2011) (citing 29 U.S.C. § 255(a)). When defendants are in default, the court may accept the plaintiff's allegation that the defendants' violation was willful, such that a three-year statute of limitations would apply in this case. See Angamarca v. Pita Grill 7 Inc., 2012 WL 3578781, at *4 (S.D.N.Y. Aug. 2, 2012) (accepting plaintiff's allegation of defendants' willful violation where defendants defaulted). Claims brought pursuant to the NYLL are subject to a six-year statute of limitations. See Byer v. Periodontal health Specialists of Rochester, PLLC, 2021 WL 3276725, at *2 (2d Cir. 2021) (citing NYLL § 663(1), (3)). All of Plaintiffs' claims are timely under the NYLL, so the Court uses the state's longer statute of limitations to encompass claims from 2017 that fall outside of the FLSA's statute of limitations. See, e.g., Elisama v. Ghzali Gourmet Deli Inc., 2016 WL 11523365, at *11 (S.D.N.Y. Nov. 7, 2016) (applying NYLL's six-year statute of limitations because it provided the greatest measure of relief), adopted by 2018 WL 4908106 (S.D.N.Y. Oct. 10, 2018); Gamero v. Koodo Sushi Corp., 272 F.Supp.3d 481, 498, 515-16 (S.D.N.Y. 2017) (same), aff'd, 752 Fed.Appx. 33 (2d Cir. 2018).
As noted above, Plaintiff bears the burden of showing that she was not properly compensated for the hours she worked. See Grochowski v. Phoenix Const., 318 F.3d 80, 87 (2d Cir. 2003); see also Pineda, 831 F.Supp.2d at 674. Where, as here, the Defendants have defaulted and the Plaintiff lacks access to the employment records necessary to prove that she was not properly compensated, she may meet the burden through her recollection by submitting an affidavit, which she has done. Elisama, 2016 WL 11523365, at *4 (quoting Santillan v. Henao, 822 F.Supp.2d 284, 294 (E.D.N.Y. 2011)).
The Court must determine Plaintiff's regular hourly rate of pay to determine whether Plaintiff was paid the prevailing wage. Under the FLSA, the regular hourly rate of pay of an employee is calculated by dividing the total remuneration for employment in a workweek by the total number of hours actually worked. 29 C.F.R. § 778.109. Similarly, under the NYLL for a non-hospitality employee, the regular hourly wage is calculated by dividing the total hours worked into the employee's earnings. N.Y. Comp. Codes R. & Regs. Tit. 12 § 142.-2.16.
Plaintiff attests that she worked six days a week for 14.5 hours a day from around July 1, 2017 to around March 31, 2020 or 87 hours a week and was paid $2,000 a month. This amounts to $24,000 a year or $461.54 a week ($24,000/52 weeks), resulting in a regular rate of pay of $5.30 for 87 hours of work a week ($461.54/87 hours). See Gunawan v. Sake Sushi Rest., 897 F.Supp.2d 76, 89 (E.D.N.Y. 2012) (similarly calculating an effective minimum wage where plaintiff was paid a monthly flat fee for over 40 hours of work a week). Thus, Plaintiff was not paid the appropriate minimum wage rate or overtime rate. As noted above, Plaintiff is entitled to recover based on New York's wage rates because they are higher than the federal rates. The applicable minimum wage rate for large employers in New York City was $11 for the period from July 1, 2017 to December 30, 2017; $13 for the period from December 31, 2017 to December 30, 2018; and $15 for the period from December 31, 2018 and on. Art. 19 NYLL Sec. 652.
Also, under the NYLL, employers are required to pay employees an extra hour's pay at the NYLL minimum wage rate for each day the employee works more than ten hours. NYCRR § 146-1.6(a); see also NYCRR § 142-2.18 (“The spread of hours is the interval between the beginning and end of an employee's workday.” (emphasis in original)); Shahriar v. Smith & Wollensky Rest. Grp., Inc., 659 F.3d 234, 241 (2d Cir. 2011); Elisama, 2016 WL 11523365, at *4. Plaintiff attested that she worked more than 10 hours every day, six days a week. Thus, she is entitled to spread of hours pay as well.
The charts below detail the Court's calculations:
| Date | Weeks in period | Applicable Minimum Wage | Minimum Wage Differential (minimum wage less regular rate of 5.30) | Hours worked | Total owed (minimum wage differential*hours worked*weeks) |
| 7/1/2017 - 12/30/2017 | 26 | $11 | $5.70 | 40 | $5,928 |
| 12/31/2017 - 12/30/2018 | 52 | $13 | $7.70 | 40 | $16,016 |
| 12/31/2018 - 3/3/2020 | 65 | $15 | $9.70 | 40 | $25,220 |
| Total Owed for Minimum Wage | $47,164 |
| Date | Weeks in period | Applicable Minimum Wage | Days Spread of Hours owed (6 days/weeks in period) | Total Owed |
| 7/1/2017 - 12/30/2017 | 26 | $11 | 156 | $1,716 |
| 12/31/2017 - 12/30/2018 | 52 | $13 | 312 | $4,056 |
| 12/31/2018 - 3/3/2020 | 65 | $15 | 390 | $5,850 |
| Total Spread of Hour Wages Owed | $11,622 |
Plaintiff also attested that she worked 87 hours a week, or 47 hours of overtime a week. The charts below detail the Court's calculations:
| Pay Period | Weeks in period | Overtime Rate | Overtime diff owed (overtime rate-$5.30) | Hours of overtime/week | Total Owed (overtime diff*hours overtime a week*weeks in period) |
| 7/1/2017 - 12/30/2017 | 26 | $16.50 | $11.20 | 47 | $13,686.40 |
| 12/31/2017 - 12/30/2018 | 52 | $19.50 | $14.20 | 47 | $34,704.80 |
| 12/31/2018 - 3/3/2020 | 65 | $22.50 | $17.20 | 47 | $52,546.00 |
| Total Owed for Overtime Wage | $100,937.20 |
Therefore, Plaintiff is entitled to a total of $159,723.20 in minimum wage, overtime, and spread of hours.
III. Whether Plaintiff alleges Standing for Statutory Damages
Plaintiff seeks statutory damages for Defendants' failure to provide wage notices in compliance with New York's Wage Theft Prevention Act (“WTPA”), and NYLL § 195(1) and (3), which requires employers to “provide [their] employees, in writing . . . a notice containing . . . the rate or rates of pay thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or other allowances.” N.Y. Lab. Law. § 195(1) and (3). New York Labor Law provides a private cause of action for violations of NYLL Sections 195(1) (new hire notices) and 195(3) (wage statements). N.Y. Lab. Law. §§ 198(1-b),198(1-d). Statutory damages for failure to provide initial hire notices are $50 per day up to a maximum recovery of $5,000.00 per employee. NYLL § 198(1-b). Statutory damages for failure to provide wage statements are $250 dollars “for each work day that the violations occurred or continue to occur,” not to exceed $5,000. N.Y. Lab. Law § 198(1-d); see also Teofilo v. Real Thai Cuisine Inc., 2021 WL 22716, at *4 (S.D.N.Y. Jan. 4, 2021).
Article III of the United States Constitution confines the judicial power of the federal courts to cases where the plaintiff shows, inter alia, that she suffered a concrete injury in fact. TransUnion LLC v. Ramirez, 141 S.Ct. 2190, 2203 (2021) (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992)). A plaintiff cannot rely on the fact that the defendant committed a statutory violation: an “injury in law” does not amount to an “injury in fact” for purposes of Article III standing. Id. at 2205. Rather, a “concrete” harm is something with at least a “‘close relationship' to a harm ‘traditionally' recognized as providing a basis for a lawsuit in American courts-such as physical harm, monetary harm, or various intangible harms.” Id. at 2204 (citing Spokeo, Inc. v. Robins, 578 U.S. 330, 340-41, (2016)). An injury in fact must be pleaded in the Complaint. Maddox v. Bank of New York Mellon Tr. Co., N.A., 19 F.4th 58, 65-66 (2d Cir. 2021); see also Epstein v. JPMorgan Chase & Co., 2014 WL 1133567, at *7 n.6 (S.D.N.Y. Mar. 21, 2014) (declining to infer standing based on harms plaintiff claimed to have suffered where plaintiff failed “to make this claim in his papers”).
Since TransUnion, courts in this district have held that plaintiffs lacked standing to maintain claims in federal court for violations of statutory wage statement requirements under NYLL § 195(1) and (3) where they have not pleaded an injury in fact. Chen v. Lilis 200 W. 57thCorp., 2023 WL 2388728, at *8 (S.D.N.Y. Mar. 7, 2023) (collecting cases); see also Wang v. XBB, Inc., 2022 WL 912592, at *13 (E.D.N.Y. Mar. 29, 2022); Francisco v. NY Tex Care, Inc., 2022 WL 900603, at *7 (E.D.N.Y. Mar. 28, 2022). Similarly, courts have held a failure to describe how the lack of a new hire notice led to an injury in fact failed to satisfy Article III standing. Metcalf v. TransPerfect Translations Int'l, Inc., 2022 WL 4661926, at *15-17 (S.D.N.Y. Sept. 30, 2022); Ramirez v. Sake II Japanese Restaurant, Inc., 2023 WL 3354881, at *9 (S.D.N.Y. Apr. 24, 2023), report and recommendation adopted sub nom. 2023 WL 3346768 (S.D.N.Y. May 10, 2023); Estrada v. Lagos Lounge Inc., 2023 WL 2748846, at *5 (S.D.N.Y. Apr. 3, 2023).
In this case, Plaintiff merely states that she was not provided with a notice with her rate of pay, employer's regular pay day, and other information required by 195(1) or wage statements under 195(3). (Compl. ¶ 68-69.) She does not assert any other facts describing the injury in fact caused by not receiving these documents. Thus, she has failed to properly plead standing to assert the wage statement claims.
This does not necessarily mean Plaintiff could not make out a claim in New York State Court, as the TransUnion analysis is specific to federal standing requirements. TransUnion LLC, 141 S.Ct. 2190.
For this reason, I recommend that Plaintiff's request for statutory damages be denied.
IV. Entitlement to Liquidated Damages
Under both the FLSA and NYLL, a plaintiff who successfully brings an FLSA or NYLL claim to recoup payments owed for unpaid regular wages is eligible to recover liquidated damages equal to the total amount of his or her compensatory damages. 29 U.S.C. § 216(b); NYLL § 663(1); see also Chowdhury v. Hamza Express Food Corp., 666 Fed.Appx. 59, 60 (2d Cir. 2016); Zokirzoda v. Acri Cafe Inc., 2020 WL 359908, at *6 (S.D.N.Y. Jan. 22, 2020). A plaintiff is also eligible to a liquidated damages award for unpaid spread of hours wages under the NYLL. See Elisama., 2016 WL 11523365, at *6 (citing NYLL § 663(1)).
A plaintiff is typically entitled to a liquidated damages award under the FLSA or NYLL, unless the defendants establish good faith as a defense. 29 U.S.C. § 216(b); NYLL § 663(1); see also Chowdhury, 666 Fed.Appx. at 60; Zokirzoda, 2020 WL 359908, at *6. “The employer's burden is ‘a difficult one,' and ‘double damages are the norm and single damages the exception.'” Copantitla v. Fiskardo Estiatorio, Inc., 788 F.Supp.2d 253, 316 (S.D.N.Y. 2011) (quoting Barfield v. New York City Health & Hosps. Corp., 537 F.3d 132, 150 (2d Cir. 2008)). It is well settled that defendants in default fail to carry their burden of demonstrating good faith. Zokirzoda, 2020 WL 359908, at *6.
Here, the NYLL's six-year statute of limitations period covers all Plaintiff's New York law claims, including her NYLL spread of hours claims. Accordingly, I recommend an award of liquidated damages under the NYLL in the amount of $159,723.20 (which is equal to Plaintiffs' unpaid minimum wages, overtime, and spread of hours).
V. Entitlement to Pre-Judgment Interest
Under the FLSA, pre-judgment interest may not be awarded in addition to liquidated damages. See Fermin, 93 F.Supp.3d at 48. In contrast, NYLL permits an award of prejudgment interest in addition to liquidated damages, but such interest is not applied to liquidated or statutory damages - only to underlying wages. NYLL § 198(1-a); see also Zokirzoda, 2020 WL 359908, at *6; see Gunawan, 897 F.Supp.2d at 93 (awarding prejudgment interest on unlawful tip deductions); Ortega v. JR Primos 2 Rest. Corp., No. 15 Civ. 9183, 2017 WL 2634172, at *6 (S.D.N.Y. June 16, 2017).
The statutory pre-judgment interest rate in New York is nine percent per annum. CPLR § 5004. Where damages subject to pre-judgment interest “were incurred at various times, interest shall be computed upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date.” CPLR § 5001. Courts have “‘wide discretion in determining a reasonable date from which to award pre-judgment interest,' and interest is calculated using the simple . . . [rather than] a compounded rate.” Fermin, 93 F.Supp.3d at 49 (E.D.N.Y. 2015) (first quoting Conway v. Icahn & Co., 16 F.3d 504, 512 (2d Cir. 1994); then citing Gortat v. Capala Bros., 949 F.Supp.2d 374, 386 (E.D.N.Y. 2013)). “[W]here damages are ‘incurred at various times,' as is the case with unpaid wages over the course of several years, ‘interest shall be computed upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date.'” Castellanos v. Mid Bronx Cmty. Hous. Mgmt. Corp., No. 13 Civ. 3061, 2014 WL 2624759, at *5 (S.D.N.Y. June 10, 2014) (quoting N.Y. C.P.L.R. § 5001(b)). The intermediate date used is typically the midpoint of the plaintiff's employment. See Zokirzoda, 2020 WL 359908, at *6; see also Zheng Ming Chen v. Y Cafe Ave B Inc., 18-CV-4193 (JPO), 2019 WL 2324567, at *5 (S.D.N.Y. May 30, 2019).
Prejudgment interest should be calculated from the midpoint of Plaintiff's employment. The midpoint between July 1, 2017 and March 31, 2020 is approximately November 15, 2018. Consequently, Plaintiff should receive prejudgment interest on a principal of $159,723.20 applied from November 15, 2018 to the entry of judgment. This amount should be calculated by the Clerk of the Court in the event this Report and Recommendation is adopted.
VI. Federal Post-Judgment Interest
Plaintiff also seeks federal post-judgment interest pursuant to 28 U.S.C. §1961. The statute provides that “[i]nterest shall be allowed on any money judgment in a civil case recovered in a district court” and that “[s]uch interest shall be calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding . . . the date of the judgment.” 28 U.S.C. § 1961. An award of post-judgment interest is mandatory. Schipani v. McLeod, 541 F.3d 158, 165 (2d Cir. 2008) (“we have consistently held that an award of postjudgment interest is mandatory” (citing Westinghouse Credit Corp. v. D'Urso, 371 F.3d 96, 100 (2d Cir. 2004)); see Xochimitl v. Pita Grill of Hell's Kitchen, Inc., 2016 WL 4704917, at *19 (S.D.N.Y. Nov. 7, 2016) (awarding post-judgment interest in employment action brought pursuant to FLSA and NYLL). Accordingly, Plaintiff is entitled to post-judgment interest in an amount consistent with 28 U.S.C. § 1961.
VII. Attorneys' Fees
A plaintiff who successfully brings claims pursuant to the FLSA and NYLL is entitled to recover reasonable attorneys' fees and costs under both the FLSA and NYLL. See 29 U.S.C. § 216(b); NYLL §§ 198(1-a), 663(1); see also Feng Chen v. Patel, 2019 WL 2763836, at *14 (S.D.N.Y. July 2, 2019); Gurung v. Malhotra, 851 F.Supp.2d 583, 596 (S.D.N.Y. 2012). Plaintiff is represented by the firm J. Zhang and Associates, P.C. (the “Firm”) and work was performed by attorney Jiyuan Zhang and a paralegal. (ECF No. 22 “Zhang Aff.”); ECF No. 21-9 (“Billing Records”); ECF No. 31-1 (“Updated Billing Records”).) Plaintiff seeks an attorneys' fee award of $8,937.50.
Attorneys' fee awards are typically determined using the lodestar approach, or “the product of a reasonable hourly rate and the reasonable number of hours required by the case.” Millea v. Metro-North R.R., 658 F.3d 154, 166 (2d Cir. 2011) (quoting Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 522 F.3d 182, 183 (2d Cir. 2008)); see also Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 553 (2010). “The reasonable hourly rate is the rate a paying client would be willing to pay,” bearing in mind that “a reasonable, paying client wishes to spend the minimum necessary to litigate the case effectively.” Arbor Hill, 522 F.3d at 190. In assessing whether an attorney's hourly rate is reasonable, courts may rely on their own knowledge of a firm's hourly rates. See Gurung v. Malhotra, 851 F.Supp.2d 583, 596 (S.D.N.Y. 2012) (citing Miele v. New York State Teamsters Conference Pension & Ret. Fund, 831 F.2d 407, 409 (2d Cir. 1987)). “Courts in this District have determined in recent cases that a fee in the range of $250 to $450 is appropriate for experienced litigators in wage-and-hour cases.” Xochimitl, 2016 WL 4704917, at *20 (collecting cases); see also Lopez v. Emerald Staffing, Inc., 2020 WL 915821, at *13 (S.D.N.Y. Feb. 26, 2020) (“In this district, courts generally award experienced wage-and-hour attorneys between $300 to $400 per hour”).
In assessing whether the number of hours billed by the attorney is reasonable, courts consider “whether, at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures.” Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992) (citation omitted). Plaintiff bears the burden to produce “contemporaneous time records indicating, for each attorney, the date, the hours expended, and the nature of the work done.” Scott v. City of N.Y., 626 F.3d 130, 133-34 (2d Cir. 2010) (citation omitted); s ee also Fisher v. S.D. Prot. Inc., 948 F.3d 593, 600 (2d Cir. 2020).
District courts exercise “considerable discretion” in awarding attorneys' fees. D.B. ex rel. S.B. v. New York City Dep't of Educ., 18-CV-7898 (AT) (KHP), 2019 WL 6831506, at *1 (S.D.N.Y. Apr. 22, 2019) (internal quotation marks and citation omitted), report and recommendation adopted by 2019 WL 4565128 (S.D.N.Y. Sept. 20, 2019); see also Hensley v. Eckerhart, 461 U.S. 424, 437 (1983).
However, when awarding attorneys' fees, the court must also “clearly and concisely state reasons supporting the award.” Tackie v. Keff Enters. LLC, 2014 WL 4626229, at *6 (S.D.N.Y. Sept. 16, 2014) (internal citations omitted) (awarding attorneys' fees under FLSA and NYLL).
i. Reasonable Hourly Rate
Plaintiff was represented in this action by Jiyuan Zhang of the Firm. Zhang is the founder and managing member of J. Zhang & Associates, P.C. He has been admitted to this district since 2020. (Zhang Aff. ¶ 32.) At the inquest hearing, he represented that he was a lawyer in China starting in 2014 and then received additional U.S. legal training, moved to New York and passed the New York bar exam in 2019. Zhang's work was billed at $275 an hour. (Id. ¶ 28.) Courts in this District have found rates to be reasonable in a range of $225 to $325 for attorneys with 3-5 years of experience. See Sanchez Gallego v. Adyar Ananda Bhavean Corp., 2019 WL 131957, at *5 (S.D.N.Y. Jan. 8, 2019) (hourly rate of $350 per hour for senior associate was reasonable); Reyes v. Lincoln Deli Grocery Corp., 2018 WL 2722455, at *8 (S.D.N.Y. June 5, 2018) (hourly rate of $350 per hour was appropriate for attorney with five years of employment law experience), order clarified, 2018 WL 3105070 (S.D.N.Y. June 25, 2018); see also generally Surdu v. Madison Glob., LLC, 2018 WL 1474379, at *10 (S.D.N.Y. Mar. 23, 2018) (“Courts of this Circuit commonly allow for hourly rates of $300 to $400 for experienced attorneys or partners in FLSA and NYLL wage-and-hour cases.”) (collecting cases). Because Zhang is seeking a rate that falls in the range of what is typically awarded in these cases, it is reasonable. Therefore, I respectfully recommend that fees be awarded at the requested rate.
ii. Reasonable Hours Expended
The billing records submitted to the Court indicate that Zhang spent 32 hours working on this case. When assessing whether the hours worked were reasonable, courts consider whether “‘at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures.'” Williams, 2018 WL 3370678, at *2 (quoting Samms v. Abrams, 198 F.Supp.3d 311, 322 (S.D.N.Y. 2016)); see also Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992)). “Hours that are excessive, redundant, or otherwise unnecessary, are to be excluded . . . and in dealing with such surplusage, the court has discretion simply to deduct a reasonable percentage of the number of hours claimed as a practical means of trimming fat from a fee application.” Kirsch v. Fleet St., Ltd., 148 F.3d 149, 173 (2d Cir. 1998) (internal citations and quotation marks omitted); see also Williams, 2018 WL 3370678, at *2. Courts also consider the nature of the legal matter, reason for the fee award, whether the case involved complex issues “requiring particular attorney skills and experienced which] may command higher attorney rates,” and whether the case “require[ed] retention of a firm with the resources needed to prosecute a case effectively.” Williams, 2018 WL 3370678, at *3 (citing Arbor Hill Concerned Citizens Neighborhood Ass'n, 522 F.3d at 185-87).
Plaintiff has provided contemporaneous billing records which detail the hours expended and dates and descriptions of the tasks performed. (See Billing Records; Updated Billing Records.) This Court has reviewed the records and finds that the time spent is within the range of reasonable hours spent. Accordingly, Plaintiff should be granted an award of attorney's fees of $8,800 (32 hours * $275).
VIII. Costs
Both the FLSA and NYLL entitle prevailing plaintiffs in wage-and-hour actions to recover costs. 29 U.S.C. §216(b); NYLL §663(1). “An award of costs ‘normally include[s] those reasonable out-of-pocket expenses incurred by the attorney and which are normally charged fee-paying clients.'” Fisher v. S.D. Prot. Inc., 948 F.3d 593, 600 (2d Cir. 2020) (quoting Reichman v. Bonsignore, Brignati & Mazzotta P.C., 818 F.2d 278, 283 (2d Cir. 1987)); see also Perez Garcia v. Hirakegoma Inc., 2020 WL 1130765, at *13 (S.D.N.Y. Mar. 9, 2020).
Here, Plaintiff seeks to recover $546 in costs, which includes the $400 filing fee incurred in bringing this action, and $146 for the process server fees incurred for serving process on the Defendants in this action. These are the types of expenses that are typically reimbursed under the FLSA's and NYLL's costs provisions. See Xochimitl, 2016 WL 4704917, at *22 (awarding costs for filing and process server costs). Plaintiff submitted a receipt of the process servers and Courts may take judicial notice of the filing fee if it is noted on the docket. See Sanchez v. Jyp Foods Inc., 2018 WL 4502008, at *17 (S.D.N.Y. Sept. 20, 2018) (where plaintiff sought costs under the FLSA and NYLL, court took judicial notice of the filing fee). Because the $400 filing fee is noted on the docket, the Court may take judicial notice of that cost. (ECF No. 1.) Accordingly, I recommend awarding Plaintiff costs in the total amount of $546.
CONCLUSION
For the reasons set forth above, I recommend that Plaintiff be awarded $159,723.20 in minimum wage, overtime, and spread of hours, $159,723.20 in liquidated damages, and $8,800 in attorneys' fees, $546 in costs, plus prejudgment interest on the minimum wage, overtime, and spread of hours (that is, on $159,723.20) at a rate of nine percent per annum, and post-judgment interest to be calculated from the date the Clerk of Court enters judgment in this action until the date of payment, using the federal rate set forth in 28 U.S.C. § 1961.
Plaintiff is directed to serve a copy of this Report and Recommendation on Defendants and file proof of service of the same on the docket by two weeks from the date of this Report and Recommendation.
NOTICE
The parties shall have fourteen days from service of this Report and Recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. See also Fed.R.Civ.P. 6(a), (d) (adding three additional days only when service is made under Fed.R.Civ.P. 5(b)(2)(C)(mail), (D) (leaving with the clerk), or (F) (other means consented to by the parties)). A party may respond to another party's objections after being served with a copy. Fed. R. Civ. P.72(b)(2).
Plaintiff shall have fourteen days to serve and file any response. Defendant shall have fourteen days to serve and file any response. Any objections and any responses to such objections shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Ronnie Abrams at the United States Courthouse, 40 Foley Square, New York, New York 10007, and served on the other parties. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Abrams. The failure to file timely objections shall result in a waiver of those objections for purposes of appeal. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).