Opinion
No. 602877–2007.
06-06-2014
Wuilton CARDONA and Noel B. Ortiz, individually and on behalf of all other persons similarly situated who were employed by the Maramont Corporation, and/or other entities affiliated with, controlling, or controlled by The Maramont Corporation, with respect to certain Public Contracts awarded by The City of New York, The New York City Department of Homeless Services, The New York City Division of Municipal Supply Services, and/or other municipalities, public authorities or government entities, Plaintiffs, v. MARAMONT CORPORATION, and any related corporate entities, Defendants.
Virginia & Ambinder, LLP, New York. Kaufman Dolowich & Voluck, LLP, Woodbury.
Virginia & Ambinder, LLP, New York.
Kaufman Dolowich & Voluck, LLP, Woodbury.
CAROL R. EDMEAD, J.
MEMORANDUM DECISION
This is a class action to recover prevailing wages and supplemental benefits for work performed in furtherance of publicly financed service contracts (the “Contracts”) between defendant Maramont Corporation (“Maramont”) and various New York City municipal agencies.
In motion sequence 010, the named plaintiffs and other members of the class certified by this court on August 4, 2009 (together, “plaintiffs”), move pursuant to CPLR 3212 for partial summary judgment as to Maramont's breach of the Contracts for failure to pay living and/or prevailing wages and supplemental benefits pursuant to Section 6–109 of the Administrative Code of the City of New York (“6–109”).
In motion sequence 011, Maramont moves pursuant to CPLR 3212 for summary judgment and dismissal of the complaint, and pursuant to CPLR 902 for decertification of the class.
The motions are consolidated for the purposes of joint disposition herein.
Factual Background
From 2001 to 2011 (the “Relevant Period”), Maramont entered into the Contracts with several New York City (the “City”) agencies, including the City, Department of Education (“DOE”), Department of Homeless Services (“DHS”), and Housing Authority (“NYCHA”; collectively, the “Agencies”). Maramont agreed to provide various catering services for the provision of “individual, fresh, frozen, pre-plated, ready to heat and serve” meals to government-run homeless shelters and public schools. By the Contracts with DHS, Maramont agreed to comply with 6–109, which applies to “City Service Contracts” for “Food Services,” i.e., the “preparing and/or providing” of food. Under the DOE and NYCHA Contracts, Maramont agreed to comply with all applicable laws, ordinances and codes of the federal, state and local governments as they affect performance thereof. Attached to some of the Contracts were living/prevailing wage schedules for “Food Services” employees pursuant to 6–109 (the “Living Wage Schedules”), which were promulgated and released by the City Comptroller (the “Comptroller”).
In furtherance of the Contracts, Maramont employed plaintiffs to furnish labor at Maramont's two Brooklyn food production facilities (hereinafter referred to as “Pitkin” and “First Avenue”). During the Relevant Period, all work at Pitkin was performed in furtherance of two Contracts with DOE (collectively, the “DOE Contract”). In contrast, some work at First Avenue was performed in furtherance of the Contracts, and the remaining work was performed for other Maramont customers.
Certain work at First Avenue was performed by assembly lines, including: making salads, processing fruit, assembling sandwiches, peeling cheese, toasting bread, and cutting meat. Other employees at First Avenue also supplied various ingredients from storage areas to the assembly lines, which were used in the creation of pre-plated meals referenced by the Contracts.
Plaintiffs generally worked for Maramont for approximately eight to twelve hours per day, five to six days per week. It is undisputed that during their employment, plaintiffs were paid at an hourly rate at or near the minimum wage and did not receive at least $9.00 per hour. Likewise, it is undisputed Maramont did not pay plaintiffs living and/or prevailing wages pursuant to the Living Wage Schedules.
Maramont did not maintain or produce specific records which would depict the time any of its employees worked in furtherance of the Contracts. It concedes that it is unable to calculate how much time, if any, any particular Maramont employee spent working under the Contracts.
Thus, plaintiffs commenced this action alleging two causes of action against Maramont grounded in breach of contract, which are based on the failure to pay prevailing or living wages (and attendant benefits), respectively, pursuant to 6–109. Plaintiffs maintain that they should have been paid at the rate designated for the Level 3–Assistant Cook classification within the Living Wage Schedules. During nearly the entire Relevant Period, the combined wage and supplement benefits rate for that position was approximately $25.00 per hour.
After commencing this action, on November 12, 2009, the court granted plaintiffs' motion for class certification, certifying a class defined as:
All individuals employed by [Maramont] or any other related entities ... since September 1, 2001, who performed work that includes receipt, sorting, handling, storing, preparation and/or distribution of food, food service supplies, and pre-prepared meals pursuant to [the Contracts]. The Class does not include any clerical administrative, professional or supervisory employees of [Maramont].
Plaintiffs' Moving Papers
Plaintiffs maintain that the only issue to be decided is whether, under the Contracts, Maramont was required to pay the wages called for under 6–109. Maramont is a “City Service Contractor” that provides “Food Services” pursuant to “City Service Contracts” under 6–109, under which plaintiffs performed work. Maramont failed to pay plaintiffs no less than whichever is greater between the living wage or prevailing wage.
The court already held that the complaint states a cause of action to recover prevailing and/or living wages as damages for the breaches of contract to which plaintiffs were intended beneficiaries, and it is undisputed that plaintiffs were paid at rates less than the Living Wage Schedules mandated.
The Contracts made Maramont responsible for “providing food catering services,” specifically requiring Maramont to furnish “all labor, materials and equipment necessary and required for the provision of frozen and pre-plated food catering services, daily (three meals), seven days per week.” Also, DHS's Deputy Agency Chief of Contracting Officer testified that DHS issues “Food Service Contracts” governed by 6–109, and that Maramont's work pursuant to the contracts required the payment of “living wages.”
Each of the Contracts contains detailed specifications for the quantity, quality and types of food that needed to be prepared and provided. They also contain detailed menus that specify the individualized pre-plated meals that must be prepared and provided, and require Maramont to comply with the USDA Food Safety and Inspection Service and have a Hazard Analysis Critical Points plan.
Moreover, Paul Altobelli (“Altobelli”), Maramont's Director of Operations, testified that Pitkin acted as “the supermarket for the school district,” picking, sorting, and shipping foods to various school districts. He also confirmed that Pitkin workers worked exclusively on the Contracts.
Plaintiffs' activities at First Avenue were even more pronounced and in direct compliance with the Contracts' terms. Routine tasks (described in plaintiffs' testimony and affidavits), included preparing tuna fish, slicing meat, cutting bread, dicing cheese, and making sandwiches, salads and fruit cups.
Altobelli's testimony corroborates plaintiffs' accounts. Altobelli described the preparation of a tuna sandwich as specified by the Contracts as follows: a worker would open the tuna fish can, and mix in the specified amounts of mayonnaise and other spices. That worker would then scoop the tuna onto one slice of bread while a different worker would place a second slice of bread on top of the tuna to complete the sandwich.
Maramont's own statements belie a defense that plaintiffs did not perform “Food Services.” In its bid documents, Maramont proclaimed itself as a leader in the food manufacturing and school food industries, and boasted that it offered customized meal services to meet the needs of thousands of homeless persons, senior citizens, and schoolchildren. Maramont also referred to numerous assembly lines in order to assure NYCHA of its ability to produce thousands of meals on a daily basis. Also, it assured each agency that all of its operations were governed by strict quality control standards from initial receipt of supplies and raw products, to the shipment of finished product to the customer.
The Contracts require the payment of living wages and supplemental benefits. 6–109 requires every such contract to have annexed to it provisions obligating the contractor to comply with all applicable requirements thereunder, and providing that failure to comply may constitute a material breach. And, Maramont certified that it would comply with the section.
Maramont's CEO, Joseph Bistritzky (“Bistritzky”), admitted at his deposition to seeing the Living Wage Schedules attached to the Contracts and to certifying that Maramont would comply with 6–109, but “felt” that Maramont was not required to pay such wages, characterizing the living wage requirement as a “cockamamie thing.” He also does not recall whether anyone from Maramont sought written or verbal clarification from the Comptroller or any other government official regarding the application of 6–109 to Maramont workers.
Under case law, agreements which include provisions mandating compliance with all applicable laws constitute agreements to pay statutorily mandated wage rates, upon which plaintiff may sue as third-party beneficiaries. Here, the DOE and NYCHA Contracts containing such terms, combined with 6–109's requirement that all such City contracts include a provision obligating the contractor to comply with all applicable requirements under the section, require Maramont's compliance with 6–109. Thus, any omission of express language requiring payment of wages pursuant to 6–109 does not preclude plaintiffs from asserting breach of contract claims.
6–109 requires a City Service Contractor (such as Maramont) to pay its employees who are engaged in performing the contract the higher of the prevailing and living wage (and attendant benefits). City Service Contracts for “Food Services” are subject to the living wage and benefit rate for the classification of “Food Services” employees, which includes cooks, assistant cooks, cafeteria/counter attendants, and kitchen helpers.
Nevertheless, Maramont's payroll records indicate that it did not pay its workers at a rate equal to even the lowest rate contained in the Living Wage Schedules, as it is undisputed that Maramont paid its workers at or near the minimum wage. Thus, Maramont breached every Contract herein for the period 2001 through 2011.
Plaintiffs also submit the expert report of Thomas C. Nodell (“Nodell”), the former Labor Law Division Chief at the Comptroller's office, who was charged with administering the prevailing wage provisions for work performed under, inter alia, 6–109. Nodell stated that for the “Food Services” trade classifications under the section, the prevailing union representing City food service workers is American Federation of State, County and Municipal Employees District Council 37 (“DC 37”). Nodell added that the Comptroller based its Living Wage Schedules on DC 37's wage schedules.
Further, the expert affidavit of Henry Garrido (“Garrido”), the Associate Director of DC 37, shows that based on the regular full-time nature of the work performed and on the number of meals provided by Maramont per meal period on a daily basis to the Agencies, which exceeded 1200, plaintiffs should be classified as Level 3–Assistant Cooks. The Contracts themselves and Maramont's payroll records confirm these facts.Moreover, Maramont did not take any steps to ascertain its obligations to pay the required rates, even after this action was commenced, and the Court certified the class in 2009. As such, its abject failure to ascertain its obligations should not inure to its benefit.
As to damages, 6–109 creates a presumption of underpayment when, as here, time records are not generated and maintained by the contractor. Maramont was on notice of this requirement, based on the bid documents which included a sample payroll report, and two August 2004 letters to Bistritzky from DHS stated that Maramont was directed to pay all employees in accordance with the Comptroller's Living Wage Schedules. A copy of the Comptroller's payroll report was enclosed with the two letters.
Maramont failed to generate such records for work performed at Pitkin and First Avenue. Thus, Maramont must acknowledge that it is impossible to calculate how much time any worker worked on any particular Contract. A similar California State Court of Appeals case provides that all employees of a defendant who could have potentially worked upon projects subject to living wage requirements should be entitled to back payments for all hours worked in the absence of records indicating specific hours worked in furtherance of the subject contracts. The failure to keep required records should create a rebuttable presumption that Maramont did not properly pay plaintiffs, thereby entailing the conclusion that plaintiffs are entitled to unpaid wages at the Level 3–Assistant Cook classification for all hours worked during the relevant period.
In opposition, Maramont argues that plaintiffs' class definition is amorphous, conclusory and overly broad. 6–109 refers only to “preparing and/or providing food”; however, plaintiffs seek to incorporate “receipt, sorting, handling [and] storing” of food, as well as “food service supplies” into the class definition. Thus, plaintiffs' expansive class definition flies in the face of the statutory intent of 6–109 as well as the legislature's clear objective.
The DOE Contract, which commenced on May 1, 2006, contains no language regarding the payment of wages or benefits other than one provision that states that Maramont would comply with all of the applicable provisions of the New York State Labor Law. No reference to or indication of responsibilities under 6–109, a City law, is made or inferred therein. 6–109 is not part of the New York State Labor Law, and no incorporation of same can be inferred. Moreover, other Maramont employees who provided affidavits attached to the moving papers demonstrate that they worked only at Pitkin, which did not concern a 6–109 “Food Services” contract. To the contrary, by its very terms, the DOE Contract is a supply contract. Thus, the DOE Contract, and therefore all work performed at Pitkin, should be excluded from any class definition.
Also, plaintiffs cannot demonstrate that they performed any work under the Contracts. Named plaintiffs, including Ana Cardona, Wuilton Cardona and Noel Ortiz, testified that although they worked at First Avenue, they performed work for other clients. The averments that plaintiffs' work was sent to City facilities are speculative and based on hearsay. Further, named plaintiffs performed tasks not called for by the Contracts. By way of example, Wuilton Cardona produced pre-wrapped meals, and Ana Cardona toasted bread for sandwiches. None of the Contracts called for “pre-wrapped meals” or for “toasted” products.
Further, Maramont does not perform 6–109 “Food Services” work, as Maramont does not employ workers covered by 6–109, nor do they have any job descriptions covered by the section. 6–109 applies only to “Food Services” work performed by cooks, kitchen helpers, and cafeteria/counter attendants, which Maramont does not employ; instead, Maramont employs only assembly line workers who re-package pre-prepared food. 6–109 provides that any contracting agency letting a Food Services Contract under which workers will be employed who do not fall within the section's classifications must request that the Comptroller establish same and prevailing wage rates for the workers, but Maramont is unaware of any such request.
Additionally, the California case cited by plaintiffs is not binding on this court and is factually inapposite, as it concerned a statute with significantly different language compared with that found in 6–109, which was drafted with an intent to limit the scope of potential liability and/or damages.
Moreover, prospective damages are limited and plaintiffs' expert testimony is marginalized because, as per Harry Reichman (“Reichman”), an officer of Maramont, only approximately eight to ten percent of the First Avenue production related to the Contracts. Utilizing Garrido's flawed analysis, such a limited amount of work would effectively render each employee that did in fact perform work on the Contracts a part-time employee (and thus not subject to the Level 3–Assistant Cook designation). Further, Maramont's operational structure precludes any determination of which employees worked on the Contracts or how much time each employee spent working on the Contracts. It would be impossible for this court to determine what putative class members worked on the Contracts or what time they spent on them, if anything.
In support of this claim, Maramont attaches spreadsheets which purport to detail its labor costs for all of its contracts from 2005–2011 (including the Contracts at issue) in documents entitled “Shipment Summary by Contract–Labor Costs.”
Thus, even if plaintiffs' motion is granted, the award should only apply to those employees who actually performed work in furtherance of the Contracts.
In reply, plaintiffs note that Maramont did not submit an expert report to refute Nodell and Garrido's assertions that plaintiffs' work falls within the Level 3–Assistant Cook classification. Maramont's arguments are based on conjecture, and are devoid of any legal or factual foundation.
Plaintiffs also submit the expert affidavit of Paul M. Ribaudo (“Ribaudo”), a forensic accountant who analyzed the documentation and testimony produced by Maramont in the action. Ribaudo concludes that the claim that no more than the eight to ten percent of First Avenue production pertains to the Contracts cannot be substantiated. Ribaudo noted that Maramont's records did not reflect the work an employee performed in connection with a specific product or customer. Maramont also did not produce or maintain detailed payroll records demonstrating what type of work each employee at First Avenue performed on any given day, or whether that work was performed on the Contracts or pursuant to some other agreement. Further, it did not produce any source and/or corroborating documents to support its claim. Moreover, Maramont did not provide documentation for the period 2001 through 2004 evidencing labor costs or units shipped from First Avenue (thus rendering it impossible to ascertain the claim regarding that period).
In any event, the Shipment Details Lists from 2005–2011—upon which Maramont bases its estimate—do not accurately reflect items actually produced at First Avenue, as they include items that were not produced at First Avenue. Thus, with Maramont's own witness averring that the Shipment Details Lists do not accurately reflect items produced at First Avenue, such documents cannot be relied upon to determine the percent of Contract work performed at First Avenue.
Furthermore, the labor cost per unit in the Shipment Details Lists is based on a “standard labor rate” rather than an actual rate. Thus, the rate is an estimate, and Maramont does not produce data to support its calculations for the actual individual per unit labor costs. This is problematic because, for example, identical items listed in the same month contain varying unit labor costs.
Thus, as the documents produced by Maramont are grossly incomplete and inaccurate; offered without backup documentation; and based on contradictory estimates, the court should reject Maramont's conclusory arguments, and award plaintiffs damages for all hours worked by the class.
Maramont offered no expert or legal support for it claim that the section applies only to “Food Services” work performed by cooks, kitchen helpers, and cafeteria/counter attendants. In any event, plaintiffs testified that they performed such work, including, preparing and/or producing salads, fruit and sandwiches. And, Maramont's claim that it employs only assembly line workers who “re-package” pre-prepared food is contradicted by the deposition testimonies.
Moreover, Maramont (and not the Agencies) had the duty to ascertain the proper trade classification with the agencies or the Comptroller at the pre-bid stage. Absent a pre-bid challenge from a contractor or inquiry from the agency, the work performed by plaintiffs must fall within one of the trades already set forth in the prevailing wage schedules. Maramont never made an attempt to challenge or inquire about these rates.
The Comptroller promulgated and published the wages rates for the food services trades at issue, which date back to 2001 when the Agencies and Maramont began to enter into the Contracts. And, besides setting the wage rates, the source for determining the scope of work to be performed by laborers working on City contracts is the collective bargaining agreement by which the prevailing wage rates are set. Such principles were confirmed by the Nodell and Garrido affidavits, are supported by case law, and, other than unsubstantiated denials that the subject work falls within the ambit of the section made by Maramont, were not challenged.
The claim that plaintiffs' affirmants averred they did not perform work under the Contracts is inaccurate, as they explained that they performed work preparing and providing food in a number of fashions. In any event, the affirmants' accounts supporting plaintiffs' position were corroborated by Maramont's admissions.
As to the California case cited in the moving papers, the parties' contentions are nearly identical, and as in such case, there is reason to suspect that a substantial portion of the class's at First Avenue was performed in furtherance of the Contracts. Maramont's intentional and wanton failure to maintain records as required should not be rewarded, and plaintiffs should be entitled to proper compensation for all hours worked.
Maramont's Motion for Summary Judgment and Decertification of the Class
Maramont's Moving Papers
Maramont argues that dismissal of the complaint is warranted based on plaintiffs' failure to exhaust all administrative remedies and obtain a final determination from the Comptroller, as required and set forth in 6–109(e). 6–109(e) requires an employee to demand an investigation by the Comptroller as to whether an employer violated the section, and the investigation is limited to work performed within three years prior to the filing of the complaint. The Comptroller is then required to issue a final determination. Only after the final determination is made may the employee institute an action, and here, no such investigation or determination occurred. And, the language in 6–109(b)(5) (the subsection on retaliation and discrimination) which permits an employee to file a direct court action as an alternative to an administrative action is limited to discrimination or retaliation claims. Such language would be superfluous if the administrative complaint under subsection (e) were optional, rather than required. And, while available court action for retaliation and discrimination contains a limitations period running from the date of the alleged violation, that provision does not exempt a living wage claim.
Further, summary judgment should be granted with respect the Pitkin facility. The DOE Contract does not refer to or incorporate 6–109, and no language regarding the payment of wages and benefits exists, other than a provision to comply with “the State Labor Law.” The Administrative Code is not part of the State Labor Law, and it cannot be inferred. Thus, all work performed at Pitkin should be excluded from any class definition, and summary judgment in favor of defendant on this issue should be granted.
And, plaintiffs' failure to establish the commonality, predominance, typicality and superiority requirements set forth in CPLR 901, and the factors of 902, mandates decertification.
A class may be decertified on motion of a party or on the court's initiative. Plaintiffs' pleadings and motion papers consist of only conclusory statements and assumptions that the requirements of CPLR 901 and 902 have been met. However, courts must rigorously assess class certification requirements (especially regarding commonality and predominance), resolve factual disputes, and assess the merits of a plaintiff's claims to the extent they overlap with said requirements, a standard of scrutiny confirmed as appropriate in recent United States Supreme Court cases which concerned Federal Rule of Civil Procedure (“FRCP”) 23. Such Supreme Court caselaw did not exist at the time this court issued its class certification decision in 2009. In such 2009 decision, the court limited its inquiry into the merits of plaintiffs' claim based on whether there appeared to be a cause of action that is neither spurious nor a sham. While the court effectively espoused a “pleading standard” in certifying the class, the Supreme Court confirmed that FRCP 23 does not set forth such a lenient standard. Maramont argues that looking at the putative class anew, the class is overly broad. 6–109 refers only to “preparing and/or providing food”; thus, the incorporation of “receipt, sorting, handling and storing” of food as well as “food service supplies” improperly shoehorns other tasks and potential workers into the class.
Moreover, the current class definition improperly includes a six-year class period, as 6–109 provides that any private claim must be commenced within three years of the date of the alleged violation. And, 6–109 did not take effect until April 17, 2003.
Plaintiffs cannot satisfy the commonality requirement under CPLR 901. The essential inquiry now pertains to the potential of a class-wide proceeding to generate common answers, as opposed to common questions. Evidence of each putative class member's duties is not evidence of any violation of 6–109, given that certain plaintiffs did not perform Contract work at First Avenue. Plaintiffs' claims that the products they worked on were sent to City facilities under the Contracts are speculative and based on hearsay. The actual testimony in the record varies from individuals who testified that they performed no Contract work, to those who worked on loading docks and never touched any food product, and to those who worked at Pitkin. Moreover, the DOE contract, pertaining only to Pitkin, was not intended to be a 6–019 “Food Service” contract, but was simply a “supply” contract. Thus, any plaintiff or class member who worked at Pitkin should be excluded from the proposed class definition.
And, that Maramont employed a number of persons and entered into the Contracts does not provide the basis to determine that all class members were paid improperly. Because the common proof proffered by plaintiffs and cited by the court do not inform the analysis, the only way to determine that Maramont employees do or do not perform “Food Services” work is upon a rigorous examination of each employee's actual duties via individual testimony or mini-trials. And, individualized examinations demonstrate that common answers cannot lie.
Likewise, plaintiffs cannot satisfy the requirement that common issues predominate over individual ones, as issues of individual liability and damages predominate over common issues. Such individual questions include whether the employee actually performed Contract work and whether he or she worked at First Avenue or Pitkin; thus, they cannot be resolved on a class-wide basis. This court thus erred in finding that it did not have to consider the effect of individualized damages issues on the case as a whole, so long as they are traceable back to the common questions that predominate; and also in failing to consider the evidence that named plaintiffs did not perform any work under the Contracts.
Even if plaintiffs were able to establish the requisite linkage between liability and damages, whether there is a need for individualized inquiries, as there is here. Such damages calculations would require this court to examine job duties, menus, Contract exhibits, and in some cases, oral testimony of each class member. Only then would the factfinder be able to determine whether they performed “Food Services” work, which would require another layer of individualized analysis to determine the total amount of damages owed to any particular employee.
Nonetheless, individual inquiries with respect to liability must be weighed as well. Maramont asserts that only eight to ten percent of its entire First Avenue production related to the Contracts, to which certain named plaintiffs testified they did not perform any work. And, the class claim at issue is that they all performed Contract work. Thus, if there is evidence of individual differences in duties or experience that have a bearing on 6–109's applicability, irrespective of the scope of such differences, class treatment and the resulting application of representative evidence is simply not workable, and decertification is warranted.
As to damages, plaintiffs cannot determine how much time each day plaintiffs and/or putative class members spent working on the Contracts so as to properly appropriate damages. Here, it appears that plaintiffs seek 6–109 wages for each and every hour putative class members worked, irrespective of the Contracts. However, because such damages would be speculative and subject Maramont to grossly inflated exposure, class treatment is inappropriate. Thus, this court should decertify the class due to the requirement of individualized investigation as to damages.
Additionally, the typicality requirement cannot be met. Here, plaintiffs are not typical of the class because they are subject to unique defenses. For example, certain Maramont employees admit they worked at Pitkin, which Maramont contends did not concern a 6–109 “Food Services” Contract. Also, multiple plaintiffs have offered differing testimony regarding their job duties and lines of work that may fall outside of any Contract requirement.
Lastly, case management will be nearly impossible going forward if the class is maintained. As seen above, representative testimony and/or mini-trials will not solve the issues of commonality, predominance and typicality. Nor is this manageability issue solved by bifurcating liability and damages; judicial resources would simply be overburdened due to the issues affecting both liability and damages, even with bifurcation.
In opposition, plaintiffs first argue that Maramont's motion should be denied as it fails to attach copies of the pleadings to the motion.
In addition, an administrative determination is not a prerequisite to this action, and the court already rejected this argument in its March 12, 2008 decision, which Maramont failed to appeal. Maramont cannot, after six years, re-litigate an argument barred by the “law of the case” doctrine. In any event, plaintiffs may bring an action as third-party beneficiaries of public contracts to enforce prevailing wages and supplemental benefit underpayments without resorting to administrative remedies. Furthermore, the DOE Contract annexed to Maramont's moving papers curiously omitted the provision which incorporates all state and local laws into it.
In addition to the above, plaintiffs argue for incorporation of 6–109 as they do in their moving papers.
Plaintiffs argue that the work at Pitkin was performed under 6–109. “Food Services” means work “preparing and/or providing food” and the DOE Contract requires Maramont to provide DOE with “food.” The Pitkin Contract is specifically delineated as a “Food Service Distribution” contract. Maramont does not explain why a contract requiring the provision of food from Pitkin or First Avenue would not call for work “providing food.”
With respect to decertification, plaintiffs argue that the motion is untimely. The so-ordered stipulation governing the timing of this motion referred to motions for summary judgment and not a motion to decertify the class. Maramont provided no basis for waiting five years after plaintiffs served their final discovery responses to make its motion.It is improper to reargue a determination of the court where the time to appeal has expired, even where intervening appellate decisions change the law upon which the original decision was based. Further, while the court may decertify a class at anytime before a decision on the merits is made, Maramont offers no basis for decertification which they did not offer in opposition to the prior motion for certification. While Maramont asserts that decertification may be appropriate based on a change in the substantive law underlying the claims brought in the action, it has not argued that any change in the substantive law of 6–109 or third-party beneficiary breach of contract claims to recover underpayment of prevailing wages has occurred since the court certified the class.
And, the two Supreme Court decisions to which Maramont cites are of no avail, since the Supreme Court's interpretation of the FRCP is irrelevant to the analysis of class certification under the liberal standard provided by the CPLR. Maramont's argument ignores New York state court decisions which applied and interpreted Article 9 of the CPLR after the Supreme Court cases were decided. And, no New York State court has ever cited to either case, or applied the “rigorous analysis” standard set forth therein. Subsequent New York State case law indicates that CPLR Article 9 was intended to promote, not limit, class actions. The Court of Appeals noted that it interprets Article 9 differently from the way federal courts interpret FRCP 23, and that the statutes are not identical. And, although the state statute was patterned after the federal one, state courts are not constrained to follow the restrictive views of the federal courts regarding class certification.
Thus, Maramont makes no actual new arguments in asserting that the class should be decertified. The court has already rejected Maramont's argument that plaintiffs' class definition was overly broad. Moreover, Maramont's claim that the class improperly contains claims going back to 2001 ignores the six-year statute of limitations applicable to the breach of contract claim.
Likewise, as to commonality, this court has already rejected Maramont's argument that each putative class member's duties does not provide evidence of any violation of 6–109.
Also, the claim that some of the work plaintiffs performed was not pursuant to the Contracts cannot serve as a basis for decertification, much less for summary judgment. Maramont acknowledges that by failing to generate and maintain payroll records, it has no way of ascertaining time spent by class members performing work on a Contract. The court already ruled that Maramont's failure to do so was in dereliction of its duties under 6–109, and that it would give plaintiffs the benefit of the doubt when evaluating certification.
Further, Reichman's unsupported testimony that Maramont does not employ cooks, kitchen helpers or attendants, and that those job titles and functions are not similar to any job description or function Maramont employees perform, is insufficient to show that plaintiffs did not perform “Food Service” work. Maramont offers no expert or legitimate evidence to rebut plaintiffs' expert reports establishing the work performed as “Food Services.”
Also, determining damages is straightforward, as it is undisputed that Maramont's payroll records reflect the days and hours worked, and the hourly rates paid to the individual class members. The only calculation required is calculating the difference between the Comptroller's published wage and benefit rate for a Level 3–Assistant Cook and the hourly wage and benefit rate actually paid to each class member, and multiplying it by the total number of hours worked. Maramont's failure to keep records created the allegedly unworkable difficulties, and it cannot now absolve it of liability. There is no need for an individualized damages showing where Maramont willfully failed to keep the requisite records at all.
In reply, Maramont adds that plaintiffs' cited case law is inapposite, and that the Pitkin Contract does not obligate it to pay different wages because 6–109 cannot, as a matter of law, be read into every New York City contract without an explicit incorporation. Further, as CPLR 902 permits decertification at any time, the discovery deadline does not govern the instant motion practice. And, under New York State caselaw, the CPLR's commonality requirement is more stringent than FCRP 23's. Thus, applying Supreme Court caselaw is not a novel concept and requires an assessment of the merits of plaintiffs' claims (including those related to damages) to determine whether certification is appropriate.
Discussion
Maramont's Motion to Decertify the Class and to Dismiss
Under Article 9 of the CPLR, the Court has “considerable flexibility in overseeing a class action” (City of New York v. Maul, 14 NY3d 499, 513 [2010] ). And, contrary to plaintiffs' claim that Maramont's motion to decertify is untimely, the Court may decertify a class on motion of a party or on its own initiative “at any time before a decision on the merits if it becomes apparent that class treatment is inappropriate” (CPLR 902 ; City of New York v. Maul, 14 NY3d 514; Pludeman v. Northern Leasing Systems, Inc., 106 AD3d 612, 966 N.Y.S.2d 383 [1st Dept 2013] ). The Legislature intended Article 9 to be a liberal substitute for the narrow class action legislation which preceded it (City of New York v. Maul, supra at 514). Any error, if there is to be one, should be in favor of allowing the class action (see Pruitt v. Rockefeller Ctr. Properties, Inc., 167 A.D.2d 14, 574 N.Y.S.2d 672 [1st Dept 1991] ). Indeed, the Court of Appeals noted the absence of any cases in which it found an abuse of discretion as a matter of law in the CPLR article 9 class certification context (City of New York v. Maul, supra at 510, fn. 7).
Numerous courts have found that wage claims are especially suited to class litigation, even in cases involving differences in hours worked, wages paid, and wages due (see Ramos v. SimplexGrinnell LP, 796 F.Supp.2d 346 [EDNY 2011] ; Iglesias–Mendoza v. La Bella Farm, Inc., 239 F.R.D. 363 [SDNY 2007] ; Weinstein v. Jenny Craig Operations, Inc., 41 Misc.3d 1220(A), 981 N.Y.S.2d 639 [Sup Ct New York Cty 2013] ).
As noted above, this court granted plaintiffs' motion for class certification in 2009. Maramont did not appeal the decision or move for renewal or reargument. The court rendered its decision after reviewing substantial briefings provided by the parties and evaluating the complaint in the context of CPLR 901 and 902's requirements for class certification.
But for Maramont's contentions regarding the applicability of a so-called “rigorous analysis” standard in evaluating class certification discussed in the United States Supreme Court cases Comcast Corp. v. Behrend (133 S.Ct. 1426 [2013] ) and Wal–Mart Stores, Inc. v. Dukes (131 S.Ct. 2541 [2011] ), the motion for decertification would be denied outright on the ground that it is barred by the “law of the case” doctrine (see Martin v. City of Cohoes, 37 N.Y.2d 162 [1975];Ruiz v. Anderson, 96 AD3d 691, 948 N.Y.S.2d 44 [1st Dept 2012] ). That doctrine generally operates to preclude successive motions by the same party upon the same proof (see Ruiz, supra ) and applies only to legal determinations that were necessarily resolved on the merits in the prior decision (see Grullon v. City of New York, 297 A.D.2d 261, 747 N.Y.S.2d 426 [1st Dept 2002] (citing Baldasano v. Bank of New York, 199 A.D.2d 184, 605 N.Y.S.2d 293 [1st Dept 1993] ).
Thus, the court must determine whether the “rigorous analysis” standard of Comcast and Dukes applies to the case at bar. The standard requires federal courts to apply a “rigorous analysis” standard in evaluating class certification under FRCP 23 that entails overlap with the merits of the plaintiffs' underlying claims (see Comcast and Dukes, supra ).
Although Article 9 is based in part on FRCP 23 (see Flemming v. Barnwell Nursing Home & Health Facilities, Inc., 15 NY3d 375, 380 [2010] ), and although New York State courts have looked to the federal courts for guidance as to class certification (see Pruitt, supra; Anonymous v. CVS Corp., CVS, 2001 WL 36400135 [Sup Ct New York Cty 2001] ), the state courts are not constrained to follow federal courts' interpretations of FRCP 23 (see Rosenfeld v. A.H. Robins Co., Inc., 63 A.D.2d 11, 407 N.Y.S.2d 196 [2d Dept 1978] ).
Moreover, the state courts have maintained their liberal interpretation of Article 9 despite the Comcast and Dukes decisions (see Orgill v. Ingersoll–Rand Co., 110 AD3d 573, 973 N .Y.S.2d 205 [1st Dept 2013] (allegation of the “deprivation of monies that defendants allegedly wrongfully deducted” sufficient to show commonality); Gonzalez v. Personal Touch Moving, Inc., 2014 WL 1805534 [Sup Ct New York Cty 2014] (“Article 9 of the CPLR is to be liberally construed”); see also Weinstein, supra ). And, as plaintiffs point out, no New York State court has ever cited to Comcast or Dukes in any form, let alone in support of ordering decertification. Maramont provides no authority for why this court must use the standard set forth in Comcast and/or Dukes.
Crucially, where there is a subsequent change or development in the case law after an order is entered by a court, and where the time for appealing or reargument has expired, the original order stands regardless of whether there was a final judgment in the action (see In re Huie, 20 N.Y.2d 568, 572 [1967] (“Absent the sort of circumstances mentioned in CPLR 5015, such as newly discovered evidence, fraud, lack of jurisdiction, etc., a determination of a court from which no appeal has been taken ought to remain inviolate”)). This principle has been applied to a motion seeking decertification of a previously certified class based on new appellate case law (see Ousmane v. City of New York, 22 Misc.3d 1136(A), 880 N.Y.S.2d 874 [Sup Ct New York 2009] ).
Thus, the court finds that Comcast and Dukes are not controlling.
As such, and based of the law of the case doctrine (see Martin v. City of Cohoes, 37 N.Y.2d 162 [1975];Ruiz v. Anderson, 96 AD3d 691, 948 N.Y.S.2d 44 [1st Dept 2012] ), the court declines to disturb its 2009 ruling which ordered class certification based on its finding that plaintiffs' claims are not spurious or a sham (see Cardona v. Maramont Corp., 2009 WL 4026815 [Sup Ct New York Cty 2009] (Edmead, J.)).
Notwithstanding, the motion is granted to the extent that the class will be revised to include only work performed on or after April 17, 2003, for reasons set forth below.
Moving to the branch of Maramont's motion for summary dismissal of the complaint, it is well established that the “proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact” (Winegrad v. New York University Medical Center, 64 N.Y.2d 851, 853 [1985] ). The burden then shifts to the motion's opponent to “present evidentiary facts in admissible form sufficient to raise a genuine, triable issue of fact” (Zuckerman v. City of New York, 49 N.Y.2d 557, 562 [1980] ). However, the moving party must demonstrate entitlement to judgment as a matter of law (see Zuckerman, supra ), and the failure to make such a showing will result in the denial of the motion, regardless of the sufficiency of the opposing papers (Johnson v. CAC Business Ventures, Inc., 52 AD3d 327, 859 N.Y.S.2d 646 [1st Dept 2008] ; Murray v. City of New York, 74 AD3d 550, 903 N.Y.S.2d 34 [1st Dept 2010] ).
It is noted that Maramont's motion is not rendered fatally defective based on its failure to attach the pleadings pursuant to CPLR 3212(b), as a complete set of the papers was made available to the Court when plaintiffs' e-filed a copy of the pleadings with their motion (Studio A Showroom, LLC v. Yoon, 99 AD3d 632, 952 N .Y.S.2d 879 [1st Dept 2012] (failure to include the pleadings with its motion was properly overlooked, “as the pleadings were filed electronically and thus were available to the parties and the court”)).
Notwithstanding the above, Maramont's argument that an administrative determination is a prerequisite to a living wage law claim is barred by the law of the case doctrine (see also Martin v.. City of Cohoes, 37 N.Y.2d 162 [1975];Ruiz v. Anderson, 96 AD3d 691, 948 N.Y.S.2d 44 [1st Dept 2012] ). The court rejected this argument in its March 12, 2008 decision and order (see Cardona v. Maramont Corp., 2008 WL 752374 [Sup Ct New York Cty 2008] (Edmead, J.) (“plaintiffs' complaint to recover prevailing and/or living wages and supplemental benefits is not based on a statutory provision, but on the [Contracts] ... Thus, exhaustion of administrative remedies is unnecessary”)).
Here, Maramont fails to make a prima facie showing of entitlement to summary judgment based on its citation to and discussion regarding the DOE Contract as it pertains to work performed at Pitkin. Maramont inaccurately asserts that the DOE Contract contains no language regarding the payment of wages other than the provision that it agreed that it would comply with all of the applicable provisions of the New York State Labor Law. However, upon a reading of the complete DOE Contract (submitted by plaintiffs), the paragraph cited by Maramont includes the further provision by which it agreed to comply with all applicable laws, rules and regulations, and that every provision of law required to be inserted be deemed a part of the DOE Contract (see Filardo v. Foley Brothers, Inc., 297 N.Y. 217 [1948],rev'd on other grounds, 336 U.S. 281 [1949] ). Thus, as discussed in greater detail further below, this provision incorporates 6–109 into the DOE Contract, as 6–109 requires that every City Service Contract, such as the DOE Contract herein, shall have annexed to it a provision obligating the contractor to comply with all applicable requirements under this section and a provision that failure to comply may constitute a material breach of the Contract.
Lastly, although not explicitly listed in the “Arguments” section of its memorandum of law, Maramont's contention that no class member performed “Food Services” work under 6–109 lacks merit, and dismissal of the complaint on this ground is unwarranted.
6–109 took effect on April 17, 2003. The section notes that its requirements shall apply only to “City Service Contracts” entered into after the effective date of this section. Where a City Service Contract is renewed or extended after the effective date of this section, such renewal or extension shall be deemed new City Service Contracts and shall trigger coverage under this section if the terms of the renewed or extended City Service Contract, otherwise meet the requirements for coverage under this section.
http://www.nyc.gov/html /dfta/downloads/pdf/community/hc_ solicitation.pdf; see p. 5.
Under 6–109, a “City Service Contract” includes any written agreement between any entity and a “Contracting Agency” whereby the latter expends funds and the principle purpose is to provide services such as “Food Services.” A “Contracting Agency” includes the city agency, the expenses of which are paid in whole or in part from the city treasury or the department of education. “City Service Contractor” means any entity that enters into a City Service Contract with a Contracting Agency, and it is undisputed that Maramont is a City Service Contractor.
6–109(b)(1)(b) provides that a City Service Contractor that provides Food Services must pay its employees engaged in performing the contract “no less than the living wage or the prevailing wage, whichever is greater.” Where the prevailing wage is greater than the living wage, the City Service Contractor must provide its employees the Prevailing Wage and Supplements in accordance with the rate of wage and supplemental benefits per hour paid in the locality to workers in the same trade or occupation and annually determined by the Comptroller.
6–109 (b)(2) provides that the Living Wage is between $8.10 and $10.00 per hour, depending on the applicable year. The lowest prevailing wage rate provided by the Living Wage Schedules that could be applicable is approximately $14.00 per hour. Thus, the issue is whether plaintiffs are entitled to prevailing wages.
6–109 (a)(8), entitled “Food Services,” is defined as: “the work preparing and/or providing food. Such services shall include, but not be limited to, those as performed by workers employed under the titles as described in the federal dictionary of occupational titles for cook, kitchen helper, cafeteria attendant and counter attendant. Any contracting agency letting a Food Services Contract under which workers will be employed who do not fall within the foregoing definitions must request that the Comptroller establish classifications and prevailing wage rates for such workers .”
The federal dictionary of occupational titles contains several definitions of “Cook.” One example lists the duties of a “Cook” (313.131–018) as the following: “supervises and coordinates activities of workers engaged in preparing, cooking, and serving food in school cafeteria, cafeterias, or central school district kitchen ... Estimates daily or weekly needs and orders food supplies and equipment. Supervises and coordinates activities of workers who prepare, cook, serve food, clean premises, and wash dishware ... Participates in preparing and cooking meals ...”
A “Kitchen Helper” (318.687.010) “performs any combination of following duties to maintain kitchen work areas and restaurant equipment ... Sweeps and mops floors. Washes worktables, walls, refrigerators, and meat blocks ... Washes pots, pans, and trays by hand ... Transfers supplies and equipment between storage and work areas by hand or by use of handtruck.... Washes and peels vegetables, using knife or peeling machine. Loads or unloads trucks picking up or delivering supplies and food.”
A “Cafeteria Attendant” (311.677–010) “carries trays from food counters to tables for cafeteria patrons ...”
A “Counter Attendant” (311.677–014) performs the following tasks: “serves food from counters and steamtables to cafeteria patrons: Serves salads, vegetables, meat, breads, and cocktails, ladles soups and sauces, portions desserts. Adds relishes and garnishes ... May replenish foods at serving stations ... May carve meat ... prepare and serve salads ...”
The court further notes that the definition of “Cook Helper” (317.687–010) includes one who assists workers in preparing ready-to-serve packages by performing such tasks as cutting fruit and meats, carrying supplies to and from work stations, stove and refrigerator, storing foods in designated areas, and distributing supplies, utensils and other equipment. Additionally, the definition of “Food Assembler” (319.484–010) includes one who prepares meal trays for industrial caterers, performing duties such as filling individual serving cartons with portions of foods, placing portioned foods at appropriate stations of assembly counter to facilitate tray loading, and storing food trays to be later transported.
6–109(c)(2)(c) further provides that “a covered employer shall maintain original payroll records for each of its covered employees reflecting the days and hours worked on contracts, projects or assignments that are subject to the requirements of this section, and the wages paid and benefits provided for such hours worked. The covered employer shall maintain these records for the duration of the term of the City Service Contract and shall retain them for a period of four years after completion of the term of the City Service Contract. Failure to maintain such records as required shall create a rebuttable presumption that the covered employer did not pay its covered employees the required wages and benefits.”
6–109(d)(2) further provides that every City Service Contract shall have the following materials annexed to it, which shall be incorporated therein:” a provision obligating the City Service Contractor to comply with all applicable requirements under this section”; certification of the agreement; “a schedule of the current living wage and health benefits supplement rates, a schedule of job classifications for which payment of the prevailing wage is required under this section together with the applicable prevailing wage rates for each job classification, as determined by the Comptroller ... a provision providing that failure to comply with the requirements of this section may constitute a material breach” by the contractor.
As to the definition of “Food Services,” the phrase “including, but not limited to” has an expansive meaning, because it intends to cover or convey a non-exhaustive listing of items (see Doniger v. Rye Psychiatric Hosp. Ctr., Inc., 122 A.D.2d 873, 877, 505 N.Y.S.2d 920 [2d Dept]lv. denied 68 N.Y.2d 611 [1986] (“The language of ... including but not limited to ... negates any inference that the parties intended to exclude any possible method whereby their ownership interests would be affected, including a proceeding for judicial dissolution. The examples following the quoted language are illustrative only and do not limit the broad scope of the terms employed”); see also Johnsen v. ACP Distribution, Inc., 31 AD3d 172, 814 N.Y.S.2d 142 [1st Dept 2006] ).
As such, Maramont's argument that 6–109's provision of “Food Services” work applies only to work done by cooks, kitchen helpers, and cafeteria/counter attendants is unavailing. The section includes the language discussed in Doniger, supra, and thus does not go to limit the scope of duties that fall under the section.
In any event, it is undisputed that plaintiffs and their affirmants aver that they performed such duties as “transferring supplies and equipment between storage and work areas” and “carving meat.” Maramont's testimony (via Altobelli) confirms this:
Q:Could you give me an instance of what a production employee or manufacturing employee would be doing in the manufacture of a food product?
A:Depending upon the meal that we are producing, they could be doing anything from opening bread, opening cans of tuna fish, slicing meat, cutting bread, dicing cheese, making sandwiches (Altobelli EBT, 25:21–26:5)
Such tasks fall within the explicit federal occupational definitions of “Kitchen Helper” and “Counter Attendant.” Moreover, Doniger, which seeks to widen the scope of potential terms when considering the context of an “including but not limited to” clause, provides that plaintiffs' tasks, which include assembling sandwiches, slicing cheese, and moving food within Maramont's facilities for distribution, buttress this conclusion.
Additionally, given the requisite liberal interpretation of “preparing and/or providing food,” the terms “receipt, sorting, handling, and storing” of food and “food service supplies” fall within the ambit of 6–109, as does any work regarding “pre-wrapped” or “pre-prepared” meals and “toasting” of products. The DOE Contract requires, among other things, the “warehousing” and “inventory” of food products; thus it is covered by 6–109.
Moreover, the Contracts' explicit purposes demonstrate that they were for “Food Services.” By way of example, the DHS Contracts required the performance of “Food Catering Services”; the purpose of the DOE Contract was to “source food products and related services,” including “acquisition, storage, handling, and distribution of food products.”
Thus, the court finds that plaintiffs performed work that would be considered “Food Services” work under 6–109. Maramont's conclusory statements to the contrary (“Maramont does not employ any such workers nor do they have any such job descriptions” and “Nor did any of the affirmants of plaintiffs state that they performed such work”) are ineffective to achieve a different result (see Peckar & Abramson, P.C. v. Lyford Holdings, Ltd., 42 Misc.3d 1231(A), 2014 WL 860535 [Sup Ct New York Cty 2014] ).
The specific work performed will be discussed further, infra, in the next section, with respect to the classifications referenced by 6–109 and the Living Wage Schedules.
Despite Maramont's contentions, the fact that some of the named plaintiffs may have performed some non-Contract work does not lead to the conclusion that they did not perform any Contract work. It is undisputed that all work at Pitkin and some of the work at First Avenue were dedicated to the Contracts. Thus, Maramont's argument that plaintiffs should have shown that the applicable Contracting Agency sought new job classifications for the Contracts is unavailing, as there was no need to seek new classifications—plaintiffs' work falls within the classifications of 6–109 as drafted.
Notwithstanding the above, the Contracts that were entered into before April 17, 2003 (the effective date of 6–109) and not renewed or extended (see 6–109(f)) are not subject to the section. There is no evidence or discussion indicating that any of the Contracts entered into before the effective date were renewed or extended. Thus, and for the reasons set forth below in the next section, the motion for decertification is granted only to the extent that the class's definition shall be modified to pertain only to work performed on or after April 17, 2003, despite the court's findings (in its 2009 decision and reaffirmed herein) that the Relevant Period began in 2001. Maramont's motion is otherwise denied.
Plaintiffs' Motion for Summary Judgment
The elements of a breach of contract claim include the existence of a contract, the plaintiffs' performance thereunder, the defendants' breach thereof, and resulting damages (see Harris v. Seward Park Housing Corp., 79 AD3d 425, 913 N.Y.S.2d 161 [1st Dept 2010]citing Morris v. 702 E. Fifth St. HDFC, 46 AD3d 478, 850 N .Y.S.2d 6 [1st Dept 2007] ).
Although agreements are to be construed in accord with the parties' intent, it is well-settled that the best evidence of what parties to a written agreement intend is what they say in their writing (see Greenfield v. Philles Records, 98 N.Y.2d 562 [2002] ). Thus, an agreement that is complete, clear and unambiguous on its face must be enforced according to its plain meaning (Id.; see also White v. Continental Casualty Co., 9 NY3d 264 [2007] ).
The “[m]ere assertion by one that the contract language means something to him, where it is otherwise clear, unequivocal and understandable when read in connection with the whole contract, is not in and of itself enough to raise an issue of fact” (see Vesta Capital Mgmt. LLC v. Chatterjee Group, 78 AD3d 411, 910 N.Y.S.2d 64 [1st Dept 2010] ). An agreement that on its face is reasonably susceptible of only one meaning is unambiguous, and as such, the court is not free to alter the contract to reflect its personal notions of fairness and equity (see Greenfield, supra; Riverside S. Planning Corp. v. CRP/Extell Riverside, L.P., 13 NY3d 398 [2009] ).
Furthermore, extrinsic evidence outside the four corners of the document as to what was “really intended” but was unstated or misstated is inadmissible to add to or vary the writing, where no ambiguity exists upon the face of the agreement (see W.W.W. Assoc. v. Giancontieri, 77 N.Y.2d 157 [1990] ). Such extrinsic proof may only be considered after the court decided as a matter of law that the agreement is ambiguous (see Madison Ave. Leasehold, LLC v. Madison Bently Associates, LLC, 8 NY3d 59 [2006] ).
Employees may bring a breach of contract action against an employer to recover prevailing wages based on a contract to which plaintiff employees were intended beneficiaries (see De La Cruz v. Caddell Dry Dock & Repair Co., Inc., 21 NY3d 530 [2013];Fata v. Healy Co., 289 N.Y. 401 [1943];Pesantez v. Boyle Envtl. Servs., 251 A.D.2d 11, 673 N.Y.S.2d 659 [1st Dept 1998] ); Samborski v. Linear Abatement Corp., 1998 WL 474069 [SDNY 1998] ;
The statute of limitations for breach of contract is six years (see CPLR 213(2) ). A cause of action for breach of contract accrues at the time of the breach (see Ely–Cruikshank Co. v. Bank of Montreal, 81 N.Y.2d 399, 402 [1993] ).
As noted above, the court found that at least some plaintiffs performed “Food Services” work under 6–109. Also, based on the affirmants' testimony and payroll records annexed to plaintiffs' motion (Ambinder Aff., Exhibit “AA”), it cannot be disputed that such plaintiffs were not paid prevailing wages and benefits. Further, the affirmants' unchallenged statements establish that plaintiffs typically worked for Maramont at least 35 hours per week.
Thus, the next inquiry is whether the Contracts required compliance with 6–109.
It is undisputed that in several of the Contracts, Maramont explicitly agreed to abide by the provisions of 6–109. In others (particularly the DOE Contract), 6–109 is not explicitly referenced, but Maramont agreed to comply with all applicable laws, rules and regulations; that every provision of law required to be inserted into the Contract would be deemed part of same; and that if any such provision is not inserted, the Contract would be deemed amended to comply strictly with the law.
Moreover, as noted above, 6–109(b)(1)(b) provides that a City Service Contractor that provides Food Services must pay its employees engaged in a City Service Contract the prevailing wage if it is greater than the living wage (as it is here).
In addition, 6–109(d)(2)(a) provides that “The requirements of this section shall be a term and condition of any City Service Contract.” Moreover, 6–109(d)(2)(b) requires that all such contracts shall include a provision obligating the City Service Contractor to comply with all applicable requirements under this section; certification of the agreement; a schedule of the current living wage and health benefits supplement rates, a schedule of job classifications for which payment of the prevailing wage is required under this section together with the applicable prevailing wage rates for each job classification, as determined by the Comptroller. And, in New York, agreements which include provisions mandating compliance with “all applicable laws” constitute agreements to pay statutorily mandated wage rates upon which plaintiffs may sue as third-party beneficiaries (see Filardo v. Foley Brothers, Inc., 297 N.Y. 217 [1948],rev'd on other grounds, 336 U.S. 281 [1949] ). Thus, 6–109 incorporates the obligations thereunder into all City Service Contracts for “Food Services,” including those not explicitly so stating.
Moving forward, although it is undisputed that plaintiffs typically worked full-time, a dispute exists whether plaintiffs worked part-time or full-time in furtherance of the Contracts.
As noted above, 6–109(c)(2)(c) creates a presumption of underpayment if the employer fails to maintain payroll records for employees reflecting the days and hours worked on City Service Contracts, and “failure to maintain such records as required shall create a rebuttable presumption that the covered employer did not pay its covered employees the wages and benefits required under the section.” Moreover, this court has already recognized Maramont's failure to maintain such records in its 2009 decision.
As noted above, all work performed at Pitkin was performed in furtherance of the DOE Contract (see Murphy Aff., Exhibit “4”). Thus, all work performed by plaintiffs at Pitkin is subject to 6–109 and the Living Wage Schedules. However, it is undisputed that at First Avenue, plaintiffs performed work on both the Contracts and other accounts. As such, the essential issue is whether 6–109(b)(1)(b)'s provision that the requirements “apply for each hour that the employee works performing the City Service Contract” is applicable given the lack of payroll records that could establish the specific hours worked in furtherance of the Contracts.
The seminal case as to a scenario in which an employer fails to keep and preserve proper records is Anderson v. Mt. Clemens Pottery Co., (328 U.S. 680, 687–88 [1946],superseded by statute on other grounds as stated in Carter v. Panama Canal Co., 463 F.2d 1289, 1293 [DC Cir1972] ). In such a situation, an employee has met his or her burden by proving that he or she has performed work for which he was improperly compensated and if he or she produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference (id. ). However, for policy reasons, the burden shifts to the employer when it fails to maintain proper records:
When the employer has kept proper and accurate records the employee may easily discharge his burden by securing the production of those records. But where the employer's records are inaccurate or inadequate and the employee cannot offer convincing substitutes a more difficult problem arises. The solution, however, is not to penalize the employee by denying him any recovery on the ground that he is unable to prove the precise extent of uncompensated work. Such a result would place a premium on an employer's failure to keep proper records in conformity with his statutory duty; it would allow the employer to keep the benefits of an employee's labors without paying due compensation as contemplated by the Fair Labor Standards Act. In such a situation we hold that an employee has carried out his burden if he proves that he has in fact performed work for which he was improperly compensated and if he produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference. The burden then shifts to the employer to 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. If the employer fails to produce such evidence, the court may then award damages to the employee, even though the result be only approximate (Anderson, 328 U.S. at 687–688). The rule of Anderson applies in New York State. Where an employer has failed to maintain proper records, wage underpayments may be calculated by reference to the best evidence available, and the burden shifts to the employer to negate the reasonableness of the calculations (see Thomas v. Meyers Associates, LP, 39 Misc.3d 1217(A), 2013 WL 1777483 [Sup Ct New York Cty 2013], citing Gelco Builders Inc. v. Holtzman, 168 A.D.2d 232, 562 N.Y.S.2d 120 [1st Dept], app den 77 N.Y.2d 810 [1991] (where employer failed to maintain proper records, wage underpayments were properly calculated based on written statements by employees, together with payroll reports and check stubs)).
Labor Law § 220 —which this court discussed in its 2008 ruling that an administrative decision was not a prerequisite to section 220 or 6–109 action-provides further guidance as to the presumption against an employer which fails to maintain proper time records. Following the general rule cited in Thomas, supra, when an employer fails to keep accurate records required by section 220, back wages may be calculated using the best available evidence and the burden of undermining the reasonableness of the calculations is shifted to the employer, even where the results may be approximate (see A. Uliano & Son. Ltd. v. New York State Dept. of Labor, 97 AD3d 664, 949 N.Y.S.2d 84 [2d Dept 2012] (emphasis added). When this occurs, the amount and extent of underpayment is a matter of just and reasonable inference and may be based upon the testimony of employees (see Nowicki v. Forward Ass'n, 281 A.D. 5, 116 N.Y.S.2d 766 [1st Dept 1952] ).
This concept is consistent with the maxim that if a fact lies peculiarly within the knowledge of a party, that party has the burden of proof with respect to it (see Art Masters Associates, Ltd. v. United Parcel Service, 77 N.Y.2d 200 [1990] ).
The approximation in such cases must at least have some rational basis in the record (see A. Uliano, supra ). The public policy of providing protection to workers is embodied in the statute which is remedial and militates against creating an impossible hurdle for the employee (see Mid Hudson Pam Corp. v. Hartnett, 156 A.D.2d 818, 820, 549 N.Y.S.2d 835 [3d Dept 1989] ) (“[w]ere we to hold otherwise, we would in effect award petitioners a premium for their failure to keep proper records and comply with the statute”)).
Therefore, Maramont's contention that plaintiffs' testimony shows their inability to establish that they performed work on the Contracts is unavailing. Given the absence of adequate payroll records, the controlling case law, this court's five-year old ruling that Maramont's failure to keep such records did not inure to its benefit, and 6–109's own presumption of underpayment, it is Maramont's burden to show that plaintiffs did not perform Contract work (see Thomas, supra ), which it failed to do. Thus, the court presumes that Maramont did not pay plaintiffs properly under 6–109, and the burden shifts to Maramont to demonstrate that it in fact paid them in accordance with the section.
On this note, the Cintas case discussed by both parties is instructive. Therein, defendant corporation entered into a number of contracts with the City of Hayward, California to provide laundry services; like here, defendant employed individuals (who formed the class of plaintiffs) to perform tasks in furtherance of the contracts (see Amaral v. Cintas Corp. No. 2, 163 Cal.App.4th 1157, 1171 [Cal App 2008] ).
Before the ordinance went into effect, the city's purchasing manager sent defendant a copy of the ordinance and a letter indicating that the contracts were subject to the ordinance's requirements; defendant's general manager certified that it would comply with the ordinance. No employee of defendant contacted the city with questions about the ordinance's requirements or applicability (Cintas, 163 Cal.App.4th at 1172).
Plaintiffs filed a class action complaint against defendants based in part on breach of contract regarding the contracts between the city and defendant. It was undisputed that revenue from the city contracts constituted less than one percent of the total revenue defendant received from all customers serviced at the locations performing the contracts. Also undisputed was the fact that defendant did not separate work related to the contracts from work performed for other customers; it was impossible to tell which employees performed work on the contracts (Cintas, 163 Cal.App.4th at 1173, 1188).
The trial court found that “the most likely state of affairs is that every employee in the class worked for some amount of time on the City contract and ... there is no way of knowing whether the amount of work-in terms of time, revenue generated, pounds of laundry, or any other measurement-was large, small or nonexistent for any given class member.” (Cintas, 163 Cal.App.4th at 1188).
The court, in shifting the burden to defendant to prove which class members did not work on the city contracts, found that there was no intent in the ordinance to restrict the wage requirements; thus, the ordinance covered all hours of all employees who worked in furtherance of the contracts. The ordinance did not contain a provision that mandated a living wage for only the time an employee spent performing tasks related to the city contracts at issue. As the court noted, if the city had intended to restrict the application of the statute, it could have inserted a phrase “for hours worked on the contract” into the ordinance (Cintas, 163 Cal.App.4th at 1185–1186).
The court also noted that it might have been possible to infer an intent to restrict the wage requirements to actual hours worked on the contract if it included any record-keeping requirements; however, no such requirements existed, thereby creating an inference that the City intended to require compensation for all hours worked. (Cintas, 163 Cal.App.4th at 1186).
Nevertheless, shifting the burden to the defendant was warranted because, as plaintiffs' employer, defendant was in the best position to know which class members worked on the contracts and at which times. The court noted that “if a contractor does not wish to compensate all its employees in accordance with the [ordinance], the onus is on the contractor to segregate work on City contracts and assign it to specific employees, or at least to keep records of which employees perform contract-related work” and that “[b]ecause Cintas's business decision [to commingle contract work with non-contract work] likewise created the difficulty of determining which class members worked on the City contracts in this case, we too conclude Cintas must bear the burden of proof on the issue (Cintas, 163 Cal.App.4th at 1190–1191).
Here, 6–109 includes both provisions contemplated in Cintas which, in this court's opinion, signals an intent to restrict the wage requirements to actual hours worked in furtherance of the Contracts. However, such intent alone does not provide Maramont with a panacea against liability. 6–109 explicitly requires employers to maintain payroll records indicating specific employees and hours worked regarding City Service Contracts and provides a clear incentive to do so—failure to maintain such records creates a presumption against the employer. Thus, Maramont was on notice of its duties even more so than the defendant in Cintas, which was still held liable against the class even without an explicit record-keeping duty (see Cintas, supra ).
As seen above, the absence of a record-keeping duty in the subject ordinance was not dispositive in Cintas. Rather, settled principles of burden-shifting against employers who fail to keep adequate records formed the crux of that court's decision (see Cintas, supra ). Here, Maramont has a weaker position than the Cintas defendant, and that the subject ordinance in Cintas is inconsequential. If anything, although 6–109 spelled out Maramont's duties precisely, Maramont chose to ignore them anyway. Furthermore, Maramont's inability to ascertain which worker was working on which contract for how long was confirmed by its testimony:
Q: If I were to go onto a production line at any time during the day, would I be able to ascertain what contract the production line workers are working on?
A: No.
Q: How would you know?
A: I don't.
Q: How would anyone know?
A:You don't. (Altobelli EBT, 79:15–23).
Also, this concept was conceded by Maramont:
“Maramont's operational structure precludes any determination of which employees worked on the Contracts or how much time each employee spent performing work on the Contracts.” (Memorandum of Law in Opposition, p. 14)
In sum, Maramont will not stand to gain from its disregard of its statutory duties, of which it has been on notice for over a decade based on the Contracts themselves, this court's prior decision, as well as correspondence from the Agencies as discussed in the moving papers. Cintas is further instructive because it was undisputed that the work performed in furtherance of the city contract therein constituted only one percent of the defendant's output at the location in dispute (Cintas, 163 Cal.App.4th at 1173). Here, Maramont admits that 100 percent of the work at Pitkin was dedicated to the DOE Contract, and avers that only eight to ten percent of the work at First Avenue was performed in furtherance of the Contracts. Following Cintas, and considering the number of class members, years and full-time nature of their work, and the fact that all work at Pitkin over such time was dedicated solely to the Contract, there is every reason to infer that a substantial portion of the work performed by the class (including that at First Avenue) was performed in relation to the Contracts.
Thus, even assuming that only eight to ten percent of the First Avenue work related to the Contracts, plaintiffs are entitled to the difference in wages based on their proper classification under 6–109 and the Living Wage Schedules and what they were actually paid for all hours worked, as Maramont fails to meet its burden as to evidence indicating the hours individual class members worked in furtherance of the Contracts. In other words, Maramont's estimate—which only goes to the First Avenue work—does not negate the reasonableness of plaintiffs' position, which is an approximation based on the best evidence available; here, payroll records indicating total hours worked, combined with the affirmants' testimony (see Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687–88 [1946];A. Uliano & Son. Ltd. v. New York State Dept. of Labor, 97 AD3d 664, 949 N.Y.S.2d 84 [2d Dept 2012] ; Nowicki v.. Forward Ass'n, 281 A.D. 5, 116 N.Y.S.2d 766 [1st Dept 1952] ; Thomas v. Meyers Associates, LP, 39 Misc.3d 1217(A), 2013 WL 1777483 [Sup Ct New York Cty 2013] ).
Accordingly, there is no need to address the contentions in the Ribaudo Affidavit, which go to the veracity of Maramont's estimate.
However, as noted above, the class definition is limited to all work performed on or after April 17, 2003, as any contracts entered into before that date are not subject to the section, and there is no evidence or discussion indicating that any of the pre-effective date Contracts were renewed or extended. And, although it is likely that certain work performed after that date was performed in furtherance of Contracts entered into before 6–109's effective date, Maramont's failure to keep records renders it impossible to make this determination. Thus, following the reasoning discussed above, plaintiffs are entitled to the prevailing wage for all hours worked on or after April 17, 2003.
Therefore, the next inquiry goes to what the prevailing wage rate was in this case; specifically, whether plaintiffs should have been paid at the Level 3–Assistant Cook rate or at some other rate.
The record establishes that Maramont violated 6–109(d)(2)(b)'s requirement that the Living Wage Schedules be attached to the City Service Contract, and that Maramont breached the Contracts based on the difference between the wages it was required to pay employees pursuant to the Living Wage Schedules and the amounts actually paid.
As seen above, 6–109 requires payment of prevailing wages and benefits for “Food Services” in this case. And, as seen in 6–109 itself and further established by the Nodell and Garrido Affidavits, the prevailing wage is established by the Comptroller by the Living Wage Schedules.
The Living Wage Schedules for “Food Services” employees include five job titles: Level 1 Cook (and assistant); Level 2 Cook (and assistant); Level 3 Cook (and assistant); Kitchen Helper; and Cafeteria/Counter Attendant.
A Level 1 Cook is defined as one who, under supervision, performs non-supervisory work of moderate difficulty and responsibility in the preparation, distribution and service of pre-prepared meals, sandwiches, etc. A Level 2 Cook is defined as one who, under general supervision, performs non-supervisory work of a difficult and responsible nature in the preparation, distribution and service of meals using standard procedures and quantity recipes where less than 1,200 meals per day are prepared. A Level 3 Cook is one who, under general supervision, performs supervisory work of a difficult and responsible nature in the preparation, distribution, and service of meals, using standard procedure and quantity recipes where in excess of 1,119 meals per day are prepared. The corresponding Assistant Cook, Kitchen Helper and Cafeteria/Counter Assistant positions are not defined.
Plaintiffs, aver solely that they are Level 3–Assistant Cooks (due to the lack of evidence indicating that they performed supervisory duties) and should be paid according to the rate set forth in the Living Wage Schedules for same. In support of this contention, the Nodell Affidavit provides that the Comptroller promulgates the prevailing wage rates, and that it adopted the collectively bargained-for rates utilized by DC 37, using different names for the classifications. Nodell further noted that contractors were placed on notice that they had a duty to inquire with the Comptroller in the event there was any miscommunication or misunderstanding regarding classifications or applicable wage rates.
For example, DC 37 classification such as “School Lunch Aide” and “School Lunch Helper” are listed as “Cook” and “Assistant Cook” Levels 1, 2 or 3 by the Comptroller.
The Garrido Affidavit explains the basis for the Comptroller's classifications, as well as differences between DC 37's and Comptroller's Living Wage Schedule classifications. Garrido states that the wage classification for each trade is based solely on two factors used by the Comptroller: the number of individual prepared meals per meal period; and whether the work performed by the employees was typically part- or full-time (Nodell concurred with this assessment).
As to the discrepancies between DC 37's and the Comptroller's classifications, Garrido stated that the Comptroller's Living Wage Schedules contained three omissions. First, they fail to identify the maximum number of meals prepared and delivered under the Level 1 classifications. Second, the Level 2 classifications fail to include language limiting the range of meals to between 651 and 1,199. Third, all three levels engage in the “preparation, distribution and service of pre-prepared meals, sandwiches, etc.,” despite the fact that only the Level 1 classification included such language. Thus, to Garrido, plaintiffs should have been paid at the Level 3–Assistant Cook rate.
There is no dispute that Maramont prepared over 1,199 meals per meal period under the Contracts. However, the Living Wage Schedules must be evaluated under contract interpretation principles, as they form part of the Contracts.
The court will consider the Nodell and Garrido Affidavits in its interpretation of the Living Wage Schedules, despite them being “extrinsic evidence” beyond the four corners of the Contracts, as the Living Wage Schedules are ambiguous (see Madison Ave. Leasehold, LLC v. Madison Bently Associates, LLC, 8 NY3d 59 [2006];W.W.W. Assoc. v. Giancontieri, 77 N.Y.2d 157 [1990] ). Ambiguity exists because the “Assistant Cook,” “Kitchen Helper,” and “Cafeteria/Counter Attendant” classifications are not defined (see Leech v. The Weinstein Co., LLC, 2013 WL 448695 [Sup Ct New York Cty 2013] (term deemed ambiguous when it was not defined in subject agreement, and parties offered competing plausible interpretations of its meaning)). Moreover, the reference to “meals” in the classifications for Level 2 and 3 Cooks is ambiguous, because it is unclear as to whether such “meals” include the “pre-prepared meals” and “sandwiches” listed in the Level 1 Cook classification.
Thus, based on the affidavits, together with the foregoing evidence, plaintiffs established prima facie their entitlement to summary judgment as to their right to be paid according to the rate set forth under Level 3–Assistant Cook.
Maramont fails to raise a triable issue of fact regarding the conclusions provided by Nodell and Garrido. In fact, Maramont fails to offer any argument, let alone expert evidence, in opposition, which would support a conclusion that any other level besides Level 3–Assistant Cook is applicable to plaintiffs. Maramont's opposition cannot be construed in any way to challenge plaintiffs' demonstration, as the court has already rejected its arguments entirely.
Conclusion
In sum, the class definition is modified to limit the covered work to that performed after April 17, 2003, but otherwise remains in accordance with the court's 2009 class certification decision. Plaintiffs' motion for partial summary judgment is granted, and Maramont is liable for the difference between the prevailing wage as set forth in the applicable (by year) Living Wage Schedules for Level 3–Assistant Cook and the wages actually paid to each plaintiff (and member of the class) for all hours worked during the class periodBased on the foregoing, it is hereby
ORDERED that Maramont's motion is granted only to the extent that the class definition is amended to limit the class period to cover work performed by plaintiffs on or after April 17, 2003; the remainder of the motion is denied with prejudice; and it is further
ORDERED that plaintiffs' motion for partial summary judgment in its favor on its breach of the contract claim for failure to pay living and/or prevailing wages and supplemental benefits pursuant to Section 6–109 of the Administrative Code of the City of New York is granted; and it is further
ORDERED that plaintiffs shall file a note of issue within 30 days of entry of this order, and that the matter be set for a trial on the issue of damages before J.H.O. Ira Gammerman; and it is further
ORDERED that counsel for plaintiffs shall serve a copy of this order with notice of entry on Maramont and the Special Referee Clerk, Room 119M, within 30 days of entry to arrange a date for the reference to J.H.O. Gammerman.
This constitutes the decision and order of the Court.
Motion sequence 010 and 011 are consolidated and decided as follows:
Based on the accompanying Memorandum Decision, it is hereby
ORDERED that Maramont's motion is granted only to the extent that the class definition is amended to limit the class period to cover work performed by plaintiffs on or after April 17, 2003; the remainder of the motion is denied with prejudice; and it is further
ORDERED that plaintiffs' motion for partial summary judgment in its favor on its breach of the contract claim for failure to pay living and/or prevailing wages and supplemental benefits pursuant to Section 6–109 of the Administrative Code of the City of New York is granted; and it is further
ORDERED that plaintiffs shall file a note of issue within 30 days of entry of this order, and that the matter be set for a trial on the issue of damages before J.H.O. Ira Gammerman; and it is further
ORDERED that counsel for plaintiffs shall serve a copy of this order with notice of entry on Maramont and the Special Referee Clerk, Room 119M, within 30 days of entry to arrange a date for the reference to J.H.O. Gammerman.
This constitutes the decision and order of the Court.
Motion sequence 011 is decided under motion sequence 010.
This constitutes the order of the Court.