Opinion
1:20-cv-04789 (MKV) (SDA)
05-10-2023
Sergio Torres, Plaintiff, v. Golden Home Furniture Inc., et al., Defendants.
REPORT AND RECOMMENDATION
STEWART D. AARON UNITED STATES MAGISTRATE JUDGE
TO THE HONORABLE MARY KAY VYSKOCIL, UNITED STATES DISTRICT JUDGE:
On March 21, 2022, Certificates of Default were entered in this wage-and-hour suit brought under the Fair Labor Standards Act (“FLSA”) and the New York Labor Law (“NYLL”) in favor of Plaintiff Sergio (“Plaintiff” or “Torres”) and against Defendants Golden Home Furniture Inc. and 7 Star Furniture Inc. (collectively, “Defendants”). (Certs. of Default, ECF Nos. 87, 91.) On February 10, 2023, Plaintiff filed a motion for a default judgment against Defendants. (Pl.'s 2/10/23 Not. of Mot., ECF No. 104.) On May 8, 2023, Plaintiff's motion was referred to me for a report and recommendation. (Order of Ref., ECF No. 109.)
For the reasons set forth below, I respectfully recommend that the Court enter a default judgment against Defendants as set forth in the Conclusion below.
In light of Defendants' default, the Court is required to accept all of Plaintiff's allegations as true, except for those pertaining to damages. See, e.g., Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009).
Defendants own, operate or control furniture stores, located at 5550 Broadway, Bronx, New York 10463, under the name “Golden Home Furniture” and at 190 W. 231 St., Bronx, New York 10463, under the name “7 Star Furniture.” (Am. Compl., ECF No. 68, ¶ 2.) Torres was employed as a general assistant at these furniture stores from approximately February 2017 until on or about April 20, 2020. (Id. ¶¶ 4, 14.) During that period, Torres worked from approximately 10:00 a.m. until on or about 8:30 p.m., Mondays through Saturdays, typically about 63 hours per week. (Id. ¶ 39; Torres 2/1/23 Decl., ECF No. 105-8, ¶ 10.) For his work, Torres was paid in cash a fixed salary of $540.00 per week. (Am. Compl. ¶¶ 40-41; Torres 2/1/23 Decl. ¶¶ 11-12.) He was not paid any overtime compensation for the hours he worked. (Am. Compl. ¶ 5.)
Defendants did not provide Torres an accurate statement of wages, as required by NYLL § 195(3). (Am. Compl. ¶ 46.) Defendants did not give any notice to Torres, in English and in Spanish (his primary language), of his rate of pay, the employers' regular pay day and such other information as required by NYLL § 195(1). (Id. ¶ 47.)
DISCUSSION
I. Liability For Minimum Wage And Overtime Compensation
A party “against whom a judgment for affirmative relief is sought” is in default when it “has failed to plead or otherwise defend.” Fed.R.Civ.P. 55(a). As a “default is an admission of all well-pleaded allegations against the defaulting party[,] . . . a district court must accept as true all of the factual allegations of the non-defaulting party and draw all reasonable inferences in its favor.” Belizaire v. RAV Investigative and Sec. Servs. Ltd., 61 F.Supp.3d 336, 344 (S.D.N.Y. 2014) (citations & quotation marks omitted). Nonetheless, a district court must “determine whether the [plaintiff's] allegations establish [the defendant's] liability as a matter of law.” Id. (quoting Finkel, 577 F.3d at 84). “[A] default judgment entered on well-pleaded allegations in a complaint establishes a defendant's liability.” Id. (quoting Trans World Airlines, Inc. v. Hughes, 449 F.2d 51, 69 (2d Cir. 1971), rev'd on other grounds, 409 U.S. 363 (1973)). “To determine whether the plaintiff's allegations are well pleaded [for purposes of a default judgment], the Court applies the same standards that govern a motion to dismiss under [Rule] 12(b)(6).” Conan Props. Int'l LLC v. Sanchez, No. 17-CV-00162 (FB) (RLM), 2018 WL 3869894, at *2 (E.D.N.Y. Aug. 15, 2018) (citing Steginsky v. Xclera Inc., 741 F.3d 365, 368 (2d Cir. 2014)).
In the present case, Plaintiff adequately pled violations of the minimum wage and overtime provisions of the FLSA and NYLL. He plausibly alleged that Defendants failed to pay him at the applicable minimum hourly rate, in violation of 29 U.S.C. § 206(a) and NYLL § 652(1). (Am. Compl. ¶¶ 63-69, 74-78.) He also plausibly alleged that Defendants failed to pay him overtime compensation at a rate of one and one-half times the regular rate of pay for each hour worked in excess of forty hours in a work week, in violation of 29 U.S.C. § 207(a)(1) and the NYLL. (Id. ¶¶ 70-73, 79-82.) Thus, Defendants' liability has been established for these violations.
II. Liability For Failure to Provide Notices and Wage Statements under NYLL
The Wage Theft Prevention Act requires employers to provide annual wage notices to employees hired after April 9, 2011, and to provide each employee with accurate wage statements each time wages are paid. See NYLL §§ 195(1)(a), 195(3). Section 195(1) requires an employer to provide employees a notice at the time of hiring, containing, among other things, “the rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or other; [and] allowances, if any, claimed as part of the minimum wage, including tip, meal, or lodging allowances ....” NYLL § 195(1)(a). Section 195(3) requires that employers provide employees with certain wage statement information “with every payment of wages.” NYLL § 195(3). An employer's failure to comply with either section of the law makes them liable for damages for each instance that the violations occurred or continued to occur. See NYLL § 198(1-b) (stating that damages for wage notice violations under § 195(1) accumulate at rate of $50 per day, but not to exceed $5,000); § 198(1-d) (stating that damages for wage statement violations under § 195(3) accumulate at rate of $50 per day but may not exceed $5,000).
Plaintiff sufficiently pled that Defendants failed to comply with NYLL § 195(1)(a) and § 195(3). (Am. Compl. ¶¶ 83-88.) Plaintiff nevertheless lacks standing to maintain these claims. In Trans Union LLC v. Ramirez, 141 S.Ct. 2190 (2021), the Supreme Court held that “[o]nly those plaintiffs who have been concretely harmed by a defendant's statutory violation may sue that private defendant over that violation in federal court.” Id. at 2205 (emphasis in original). With regard to the NYLL provisions, courts have held that “plaintiffs lack standing under TransUnion to claim violations of the NYLL wage notice and wage statement provisions where the plaintiff cannot demonstrate a tangible injury as a result of the defendant's violation of these provisions.” Huerta v. 101 N. Laundromat Inc., 21-CV-06127 (ARR) (CLP), 2023 WL 199699, at *2 (E.D.N.Y. Jan. 17, 2023); accord Pastrana v. Mr. Taco LLC, 18-CV-09374 (GBD) (SN), 2022 WL 16857111, at *7 (S.D.N.Y. Sept. 23, 2022) (“Plaintiffs have not demonstrated how their lack of notice resulted in an injury greater than Defendants' minimum wage, overtime, and spread-of-hours wage violations. Nor have Plaintiffs identified an informational injury with consequences beyond this lawsuit. Accordingly, Plaintiffs cannot recover under NYLL wage notice and statement provisions.”), adopted, 2022 WL 16857107 (S.D.N.Y. Nov. 10, 2022). Because Plaintiff lacks standing, he cannot recover damages for violation of the NYLL wage notice and statement provisions.
III. Damages For Minimum Wage And Overtime Compensation
The remaining issue is the amount of damages to which Plaintiff is entitled on his minimum wage and overtime claims. Plaintiff bears the burden of establishing his entitlement to recovery and thus must substantiate his claims with evidence to prove the extent of his damages. See, e.g., Greyhound Exhibit group, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992).
Although the Court may hold a hearing to assess damages, a hearing is not required when a sufficient basis on which to make a calculation exists. See Fed.R.Civ.P. 55(b)(2); see also Bricklayers & Allied Craftworkers Local 2, Albany, N.Y. Pension Fund v. Moulton Masonry & Const., LLC, 779 F.3d 182, 189 (2d Cir. 2015). Indeed, the Second Circuit has approved the holding of an inquest by affidavit, without an in-person court hearing, “as long as [the Court] ensured that there was a basis for the damages specified in the default judgment.” Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (citation omitted). Here, I rely on Plaintiff's submissions, which contain a sufficient evidentiary basis to determine Plaintiff's damages.
An employee seeking to recover unpaid wages has the burden of proving that he performed work for which he was not properly compensated. See Angamarca v. Pita Grill 7 Inc., No. 11-CV-07777 (JGK) (JLC), 2012 WL 3578781, at *3 (S.D.N.Y. Aug. 2, 2012). An employer is required to maintain “records of the persons employed by him and of the wages, hours, and other conditions and practices of employment maintained by him ....” 29 U.S.C. § 211(c); see also 12 N.Y. Compilation Codes R. & Regs. (“NYCRR”) § 146-2.1. Absent such documentation, an employee may establish his right by relying on his recollection alone. An affidavit or declaration that sets forth the number of hours worked is sufficient. See Angamarca, 2012 WL 3578781, at *3.
Once an employee has presented his evidence, an employer then may “come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee's evidence.” Angamarca, 2012 WL 3578781, at *4 (internal citations and quotations omitted). “If the employer fails to do so, the court may enter judgment in the employee's favor, using her recollection to determine damages, even though the result be only approximate.” Id. Because Defendants have defaulted, Plaintiff's representations as to the dates and hours he worked will be credited and his damages will be calculated on that basis.
A. Unpaid Minimum And Overtime Wages
Plaintiff asserts claims under both the NYLL and the FLSA. The statute of limitations under the NYLL is six years. See NYLL § 663(3). This action was filed on June 23, 2020. Thus, Plaintiff may recover damages for the period commencing when he first started his employment with Defendants in February 2017.
1. Legal Standards
State and federal law require employers to pay to employees at least a minimum hourly rate for every hour they work. See 29 U.S.C. § 206(a); 12 NYCRR § 146-1.2. Plaintiff may not recover under both the NYLL and the FLSA for the same injury, but he is entitled to recover damages under the statute that provides him the greatest relief. See Angamarca, 2012 WL 3578781, at *4. Here, New York's minimum wage during the relevant period was greater than the minimum wage under federal law. Thus, the New York minimum wage will be applied. The relevant minimum wage under the NYLL (see Bodo Decl., ECF No. 105, ¶ 44) was $10.50 on and after December 31, 2016; $12.00 on and after December 31, 2017; $13.50 on and after December 31, 2018; and $15.00 on and after December 31, 2019. See N.Y. Lab. Law § 652(a).
Under the FLSA, employees must be paid one-and-one-half times their regular rate for each hour worked over forty (40) hours in a week. See 29 U.S.C. § 207(a)(1). New York's rules on overtime explicitly incorporate those of the FLSA, and thus require pay at one-and-one-half times the regular rate for each hour over forty hours worked in a week. See 12 NYCRR § 142-2.2. In cases where the regular rate is less than minimum wage, overtime is calculated by multiplying the statutory minimum wage by 1.5. See Baltierra v. Advantage Pest Control Co., No. 14-CV-05917 (AJP), 2015 WL 5474093, at *5 (S.D.N.Y. Sept. 18, 2015).
2. Plaintiff's Minimum And Overtime Wages
Where an employee receives a straight weekly salary, there is a rebuttable presumption under the FLSA that their salary covers 40 hours worked. See Cabrera v. New York Fresh Meat Inc., No. 15-CV-01325 (JGK) (SDA), 2018 WL 3300647, at *6 (S.D.N.Y. Mar. 29, 2018), report and recommendation adopted, 2018 WL 2192187 (S.D.N.Y. May 14, 2018). Similarly, “[u]nder the NYLL, the Court divides the pay the plaintiff in question actually received by the lesser of 40 hours or the actual number of hours he worked during the work week.” Hernandez v. Jrpac Inc., 14-CV-04176 (PAE), 2016 WL 3248493, at *32 (S.D.N.Y. June 9, 2016) (citation omitted). Thus, here, the Court presumes that Plaintiff was paid $13.50 per hour (i.e., the $540.00 paid per week divided by 40).
Plaintiff submitted to the Court calculations of the amounts of minimum and overtime wages that the Plaintiff contends are due to him. (See Bodo Decl. ¶ 57 & Ex. I (ECF No. 105-9).)
The Court finds the calculations set forth by the Plaintiff to be sound.Accordingly, Plaintiff is entitled to the sum of $80,034.00 in minimum and overtime wages.
The Court notes that, as Plaintiff's damages chart reflects, Plaintiff only has damages attributable to minimum wage claims in 2020, since prior to 2020, his hourly rate equaled or exceeded the minimum wage. (See Bodo Decl., Ex. I.)
B. Liquidated Damages
Plaintiff is entitled to liquidated damages under both the FLSA and the NYLL, but not both. See Rana v. Islam, 887 F.3d 118, 123 (2d Cir. 2018). The NYLL entitles Plaintiff to liquidated damages since Defendants' wage violations were “willful.” NYLL §§ 198(1-a), 663(1). NYLL § 663(1) provides that Plaintiff is entitled to “liquidated damages equal to one hundred percent of the total of such underpayments found to be due.” Plaintiff is entitled to liquidated damages on the total amounts of unpaid minimum and overtime wages under the NYLL in an amount equaling 100% of the total amount due. Thus, the Court finds that Plaintiff is entitled to liquidated damages under the NYLL in the amount set forth above, i.e., $80,034.00.
Since Defendants defaulted, they have made no showing of good faith to merit reducing or denying liquidated damages. See Pastrana, 2022 WL 16857111, at *10.
C. Pre-Judgment Interest
Plaintiff seeks pre-judgment interest on his NYLL claims. Plaintiff is entitled under New York law to pre-judgment interest at the statutory rate of 9% per year. See N.Y. C.P.L.R. §§ 5001, 5004. Pre-judgment interest applies only to the amount of compensatory damages and excludes the amount of liquidated damages. See Angamarca, 2012 WL 3578781, at *9. Where unpaid wages “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.” N.Y. C.P.L.R. § 5001(b). I recommend that pre-judgment interest be calculated by applying the statutory interest rate to the entire principal amount due under the NYLL, beginning on such an “intermediate date” and running up until and including the date judgment is entered. See Angamarca, 2012 WL 3578781, at *9.
Plaintiff was employed by Defendants from approximately from approximately February 1, 2017 until on or about April 20, 2020. (Am. Compl. ¶¶ 4, 14.) Therefore, I recommend that prejudgment interest start to run on the reasonable intermediate date of September 11, 2018 (i.e., the median date between February 1, 2017 and April 20, 2020) on the sum of $80,034.00. Prejudgment interest should be calculated up to the date of the entry of judgment.
IV. Attorneys' Fees And Costs
Plaintiffs seek $3,567.50 in attorneys' fees and costs in the amount of $994.00, totaling $4,561.50. (Bodo Decl. ¶ 79.) Under the FLSA and NYLL, a prevailing party is entitled to recover reasonable attorneys' fees and costs. See 29 U.S.C. § 216(b); NYLL §§ 198(1-a), 663. “[T]he fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates.” Hensley v. Eckerhart, 461 U.S. 424, 437 (1983).
While a district court retains discretion to determine what constitutes a reasonable fee, “this discretion is not unfettered.” Millea v. Metro-North R.R. Co., 658 F.3d 154, 166 (2d Cir. 2011). “[W]hen a prevailing party is entitled to attorneys' fees, the district court must abide by the procedural requirements for calculating those fees articulated by [the Second Circuit] and the Supreme Court.” Id. “Both [the Second Circuit] and the Supreme Court have held that the lodestar-the product of a reasonable hourly rate and the reasonable number of hours required by the case-creates a ‘presumptively reasonable fee.'” Id. (citations omitted). This approach is intended to “produce[] an award that roughly approximates the fee that the prevailing attorney would have received if he or she had been representing a paying client who was billed by the hour in a comparable case.” Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 551 (2010) (citations and emphasis omitted); see also Bergerson v. N.Y. State Office of Mental Health, 652 F.3d 277, 289-90 (2d Cir. 2011) (“A reasonable hourly rate is what a reasonable, paying client would be willing to pay, given that such a party wishes to spend the minimum necessary to litigate the case effectively.”) (internal quotation marks and citations omitted).
A. Reasonable Hourly Rates
Plaintiff seeks an hourly rate of $350.00 for attorneys Jarret Bodo and Catalina Soto and $125.00 for paralegals. (Bodo Decl. ¶¶ 74-76.) Considering their backgrounds and experience (see id.), and taking into account the so-called Johnson factors, the Court reduces the hourly rate for Attorney Bodo to $200.00, see Tarax v. Blossom W. Inc., No. 19-CV-06228 (JSR), 2022 WL 2132749, at *2 (S.D.N.Y. June 14, 2022) (reducing Bodo hourly rate from $350.00 to $200.00); reduces the hourly rate for Attorney Soto to $225.00, see id. (reducing Soto hourly rate from $350.00 to $225.00); and finds the hourly rate for paralegal time to be reasonable. See id. (setting hourly rate for paralegal Hernandez at $125.00).
See Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974).
B. Reasonable Hours Expended
Plaintiff submitted a copy of an invoice setting forth the hours worked on this case. (Bodo Decl., Ex. J, ECF No. 105-10.) The Court finds the hours billed to be reasonable. Accordingly, based upon the reasonable hourly rates set forth above, Plaintiff is entitled to recover attorneys' fees, as follows:
Timekeeper
Hourly Rate
Hours Billed
Total per timekeeper
Jarret Bodo
$200.00
2.5
$ 500.00
Catalina Soto
$225.00
4.3
$ 967.50
Paralegals
$125.00
9.5
$1,187.50
TOTAL
$2,655.00
C. Costs
Finally, Plaintiff seeks recovery of costs. Pursuant to the NYLL, an employee who prevails in a wage-and-hour action is entitled to recover costs. NYLL § 663(1). The Court finds the filing fee and service-related expenses reflected in the invoice filed with the Court, in the amount of $994.00, to be reasonable.
Accordingly, the Court finds that Plaintiff should recover $2,655.00 in attorneys' fees and $994.00 in costs, for a total of $3,649.00.
CONCLUSION
For the foregoing reasons, I respectfully recommend that the Court enter judgment in favor of Plaintiff against Defendants in the amount of $160,068.00 (consisting of $80,034.00 in minimum and overtime wages and $80,034.00 in liquidated damages). I further recommend that pre-judgment interest should be awarded as set forth in Discussion Section III.C. above. In addition, I recommend that Plaintiff be awarded $3,649.00 in attorneys' fees and costs.
No later than May 12, 2023, Plaintiff's counsel shall mail copies of this Report and Recommendation to Defendants and promptly thereafter shall file proof of service.
NOTICE OF PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen (14) days (including weekends and holidays) 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. A party may respond to another party's objections within fourteen days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Such objections, and any response to objections, shall be filed with the Clerk of the Court. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Vyskocil.
THE FAILURE TO OBJECT WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. 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).