Opinion
19-CV-9482 (PAE) (BCM)
11-29-2022
MARISELA FLORES GARCIA, Plaintiff, v. GROCERY-TAQUERIA MEXICANA CORP., et al., Defendants.
HON. JENNIFER L. ROCHON, Judge.
REPORT AND RECOMMENDATION
BARBARA MOSES United States Magistrate Judge.
In this action, filed pursuant to the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., and N.Y. Labor Law (NYLL) § 190 et seq., plaintiff Marisela Flores Garcia seeks damages for unpaid minimum and overtime wages, statutory penalties, and related relief from defendants Grocery-Taqueria Mexicana Corp. (Grocery-Tacqueria), Raul Saavedra Moreno, and Ana Maria Pantle Palma. Plaintiff's claims arise out of her work as a waitress, cook, and delivery worker at defendants' 24-hour Mexican restaurant, located at 118 East 183d Street in the Bronx, which plaintiff identifies as Grocery La Mexicana (the Restaurant). Compl. (Dkt. 1) ¶¶ 1-2, 5-7, 17, 22.
According to its website, the name of the restaurant is "Grocery La Tacqueria Mexicana." See https://grocery-la-taqueria-mexicana.negocio.site/?utmsource=gmb&utmmedium=referral (last visited Nov. 29, 2022.)
After defendants failed to answer or otherwise respond to plaintiff's Complaint, she moved for a default judgment against all three defendants. On August 7, 2020, the Honorable Paul A. Engelmayer, United States District Judge, issued an order granting the motion as to liability (the Default Order) (Dkt. 36), and referred the matter to me for an inquest into plaintiff's damages. (Dkt. 37.)
In her Complaint, plaintiff styled her case as a collective action pursuant to § 16(b) of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 216(b), on behalf of herself "and other similarly situated individuals" employed by defendants. Compl. ¶ 17. However, plaintiff never identified any other similarly situated employees, and sought a default judgment only on her own behalf. Consequently, she waived her collective claims. See Galicia v. 63-68 Diner Corp., 2015 WL 1469279, at *1 (E.D.N.Y. Mar. 30, 2015) ("Because Plaintiff now seeks a default judgment and has not reiterated his request for collective action in the present motion, the Court considers Plaintiff's collective action request waived."); Lopic v. Mookyodong Yoojung Nakjie, Inc., 2 WL 10845064, at *2 (E.D.N.Y. Sept. 30, 2017) (entering a default judgment only in favor of the named plaintiff, where, despite "a clear intent in his complaint to proceed as a collective action," the plaintiff did not assert any cause of action except his own in the motion for default judgment).
For the reasons that follow, I recommend that plaintiff be awarded $28,165, comprising (a) $7,492.50 in compensatory damages for defendants' failure to pay the minimum and overtime wages required by state law, (b) $7,492.50 in liquidated damages for the wage violations, (c) $1,590 for defendants' failure to provide "spread of hours" pay under state law, (d) $1,590 in liquidated damages for the "spread of hours" violations, and (e) $10,000 in statutory damages for defendants' failure to provide the wage statements and notices required under state law, plus prejudgment interest in the amount of $2.24 per day from May 24, 2019, to the date of entry of final judgment. I further recommend that no fees be awarded to plaintiff's counsel.
I. BACKGROUND
Except where otherwise indicated, the facts in this section are taken from the Complaint, and are accepted as true for the purposes of determining defendants' liability. See City of N.Y. v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011) (quoting Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 246 (2d Cir. 2004)) ("It is an 'ancient common law axiom' that a defendant who defaults thereby admits all 'well-pleaded' factual allegations contained in the complaint."); Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009) ("In light of [defendant's] default, a court is required to accept all of [plaintiff's] factual allegations as true and draw all reasonable inferences in its favor").
Individual defendants Moreno and Palma were the "owners, managers, principals, or agents" of the corporate defendant, Grocery-Taqueria, and through that corporation operated the Restaurant. Compl. ¶¶ 1-3, 24, 26-27. In 2019, defendants had a gross annual volume of sales of "not less than $500,000." Id. ¶¶ 4, 37.
Plaintiff was employed at the Restaurant for approximately six months, from February 27 through August 19, 2019. Compl. ¶ 22. She consistently worked more than 40 hours per week. Id. ¶ 46; see also Flores Garcia Decl. (Dkt. 42-11) ¶ 14. From around February 27, 2019 to "in or about May 2019," she worked from approximately 11:30 p.m. to 10 a.m. two days a week and from approximately 11:30 p.m. to 12 noon four days per week, typically amounting to 71 hours per week. Compl. ¶ 47; Flores Garcia Decl. ¶ 15. From June 2019 until on or about August 19, 2019, she worked from approximately 1:00 a.m. to 10:00 a.m. one day a week and from approximately 1:00 am to 12:00 noon four days per week, typically amounting to 53 hours per week. Compl. ¶ 48; Flores Garcia Decl. ¶ 16. Defendants never gave her breaks or meal periods during her shifts. Compl. ¶ 54; Flores Garcia Decl. ¶ 22. Plaintiff was paid in cash for the duration of her employment, first at $8.00 per hour (through March 2019), then at $10.00 per hour (in March and April 2019), and ultimately at $11.00 per hour (from "approximately May 2019" through the end of her employment, around August 19, 2019). Compl. ¶¶ 49-53; Flores Garcia Decl. ¶¶ 17-20.
Although plaintiff was "ostensibly employed as a waitress and delivery worker," she was required to spend much of her day "performing non-tipped duties," including, inter alia, cleaning the bathroom and the kitchen and preparing food. Compl. ¶ 5; Flores Garcia Decl. ¶ 10. Plaintiff alleges that defendants "disguise[ed] Plaintiff' Flores's actual duties in payroll records by designating her as a waitress and delivery worker instead of as a non-tipped employee," so as to avoid paying her the full minimum wage. Compl. ¶ 13. However, because she spent more than 20% of each day on non-tipped activities, defendants were not eligible to pay her a lower, tip-credited wage. Id. ¶ 12. Defendants never notified plaintiff "that her tips were being included as an offset for wages," never accounted for her tips in any daily or weekly accounting of her wages, unlawfully withheld a portion of her tips (around $10.00 per day), and required her to share her tips with defendant Palma and with another cook. Id. ¶¶ 55-58; Flores Garcia Decl. ¶¶ 23-26. Further, defendants failed to pay plaintiff overtime compensation at the rate of one and one-half times her regular rate of pay for her weekly hours in excess of 40, Compl. ¶ 94, 103; Flores Garcia Decl. ¶ 27, and failed to pay "spread of hours" compensation on days she worked more than ten hours. Compl. ¶ 107.
In addition to underpaying plaintiff, defendants also failed to give her accurate wage statements and failed to give her a notice in English and Spanish (her primary language) of her regular rate of pay and other information required by state law. Compl. ¶¶ 59-61; Flores Garcia Decl. ¶¶ 28, 30.
B. Procedural History
Plaintiff filed this action on October 14, 2019. She alleges that defendants violated the minimum wage and overtime provisions of the FLSA and the NYLL by failing to pay her the required minimum wage for all of the hours she worked, as well as the required overtime premium (one and a half times the statutory minimum wage) for the hours she worked in excess of 40 per week. Compl. ¶¶ 6, 86-105. Plaintiff further claims that defendants violated the NYLL by failing to pay her an extra hour's wage in spread of hours pay on days that she worked more than 10 hours; failing to provide her with the required written wage statements and notices; taking unlawful deductions from her tips; and failing to pay her "on a regular weekly basis." Id. ¶¶ 8, 106-24. In her pleading, plaintiff seeks her unpaid regular and overtime wages, unpaid spread of hours pay, damages for improper deductions to her tips, liquidated damages, statutory damages for the wage statement and wage notice violations, and attorneys' fees and costs. Id. ¶¶ 86-124; Prayer for Relief ¶¶ (f)-(g), (n)-(r).
Defendants were served with process on January 10 and 11, 2020, but never answered or otherwise responded to the Complaint. On May 22, 2020, plaintiff submitted proposed certificates of default (Dkts. 24-26), together with a supporting affirmation (Dkts. 27, 28.) The Clerk of Court issued the certificates on May 26, 2020 (Dkts. 29-31), and on June 25, 2020, plaintiff filed her Notice of Motion for entry of a default judgment (Dkt. 32), supported by a declaration signed by her attorney, Michael Faillace (Dkt. 33), which attached, inter alia, the relevant pleadings, the certificates, and a proposed form of judgment.
The individual defendants were served in accordance with Fed R. Civ. P. 4(e)(1) and N.Y.C.P.L.R. (CPLR) § 308(2) by delivery of the summons and Complaint to their co-worker, Margarita Armenta, at the Restaurant, followed by mailing the papers to each of them at the same address. (Dkts. 13, 14.) The corporate defendant, Grocery-Tacqueria, was served in accordance with Fed. R. Civ. P 4(h), CPLR § 311(a)(1), and N.Y. Bus. Corp. Law § 306(b)(1), by delivery of the summons and Complaint to an agent of the Secretary of State in Albany, NY. (Dkt. 15.)
On July 7, 2020, finding the motion papers "in good order," Judge Engelmayer issued an Order to Show Cause, directing defendants to enter a notice of appearance and file an opposition by July 28, 2020 if they wished to oppose the default motion. (Dkt. 34.) Plaintiff served the Order to Show Cause on all three defendants on July 14, 2020, by personal delivery to defendant Palma at the Restaurant. (Dkt. 35.) However, there is no evidence on the docket of this action that plaintiff''s underlying default motion papers were mailed to defendants, as required by Local Civil Rule 55.2(c), or served upon them in any other way.
The Notice of Motion is addressed "to" the defaulted defendants at the address of the Restaurant. There is no evidence, however, that the Notice of Motion, or plaintiff's remaining motion papers, were actually sent to them.
Defendants failed to appear or object to the default motion, and on August 7, 2020, Judge Engelmayer issued the Default Order and referred the case to me for inquest.
On August 10, 2020, I issued a Scheduling Order for Damages Inquest (Sched. Order) (Dkt. 38), directing plaintiff to file proposed findings of fact and conclusions of law concerning all the damages and other items of recovery she sought, with supporting evidence, by October 12, 2020, and giving defendants until November 12, 2020, to respond if they wished. Sched. Order ¶¶ 1-2, 8. In addition, I directed plaintiff to serve those inquest materials on defendants - together with a copy of the Scheduling Order - by mail, at their last known address. Id. ¶ 7.
On October 23, 2020 (after requesting and obtaining an extension of time), plaintiff filed her Proposed Findings of Fact and Conclusions of Law (Prop. Findings) (Dkt. 41), together with the Declaration of Michael Faillace (Faillace Decl.) (Dkt. 42), which attached the Complaint, the original affidavits of service, the certificates of default, the affidavits of service of the Order to Show Cause, a damages chart prepared by counsel (Damages Chart) (Dkt. 42-9), time records showing the time spent on this action by plaintiff's attorneys at Michael Faillace & Associates (Dkt. 42-11), and plaintiff's declaration. Plaintiff seeks a total of $34,267.60 in unpaid minimum and overtime wages, spread of hours pay, liquidated damages, and statutory damages, together with $4,090 in attorneys' fees and costs. Prop. Findings ¶ 49; Damages Chart at 1-2. She does not seek damages for deductions from her tips, improper tip pooling, or late payment of wages.
Notwithstanding the requirements of Local Civil Rule 55.2 and the Scheduling Order, there is no evidence on the docket of this action that the Scheduling Order, the Proposed Findings, or any of plaintiff's other inquest materials were mailed to or otherwise served on defendants.
Not surprisingly, defendants did not file any response.
On November 4, 2021, attorney Catalina Sojo of CSM Legal entered an appearance on behalf of plaintiff Flores Garcia (Dkt. 46), and on November 8, 2021, attorney Faillace applied for leave with withdraw as her counsel, which application was granted. (Dkts. 49, 50.)
On September 19,2022, this action was reassigned to the Hon. Jennifer L. Rochon, United States District Judge. (Dkt. 52.)
II. ANALYSIS
A. Service
Before analyzing plaintiff's claim for damages, I must consider whether her counsel's failure to mail the default judgment papers and inquest materials to defendants, as required by Local Civil Rule 55.2(c) and this Court's Scheduling Order, bars the relief she seeks. Although the case law addressing this issue is sparse, several judges in this District have concluded that where, as here, the defaulted defendant was properly served with the summons and complaint, but failed to answer or otherwise respond to the lawsuit, a damages judgment may be entered without proof that the default motion papers (or any additional papers beyond the summons and complaint) were also served on that defendant.
In Moskovitz v. La Suisse, Judge McMahon noted that neither the Constitution nor the Federal Rules of Civil Procedure requires that a defaulted party "actually receive the papers in support of the motion for a default judgment," and that where the defaulted party was served with process but never appeared, "the Federal Rules don't require that a default judgment [motion] be served on him at all." 2013 WL 6197163, at *3 (S.D.N.Y. Nov. 25, 2013).Consequently, Judge McMahon directed the entry of judgment against a third-party defendant, Caruso AG, which "was served with process in this case but has never appeared," explaining that Caruso "had the constitutionally requisite notice and opportunity to appear and contest jurisdiction of the facts" whether or not it received the default motion papers. Id. at *4.Similarly, in Allstar Marketing Group, LLC v. Adfaderal, a trademark infringement case in which plaintiff sought damages from 299 defaulted defendants, Magistrate Judge Parker recommended - and Judge Carter agreed - that damages be assessed against all of those defendants, including nine who were never served with the court's inquest scheduling order or plaintiff's inquest submissions, "because neither Federal Rule of Civil Procedure 55(b)(2) nor the SDNY local rules require that the clerk's certificate be served upon an opposing party who has not appeared and because every one of the Defendants was successfully served with the prior pleadings in this case." 2021 WL 5362640, at *3 n.7 (S.D.N.Y. Sept. 20, 2021), report and recommendation adopted sub nom. Allstar Mktg. Grp., LLC v. Adfaderal, 2021 WL 4892866 (S.D.N.Y. Oct. 19, 2021). See also WowWee Grp. Ltd. v. Haoqin, 2019 WL 1316106, at *1 (S.D.N.Y. Mar. 22, 2019) (rejecting magistrate judge's recommendation that no damages be assessed due to plaintiff's use of "alternative measures" to serve its inquest submissions on the defaulted defendants as "unfounded" and insufficient to "warrant barring Plaintiffs from damages or injunctive relief").
Fed.R.Civ.P. 55(b)(2) requires service of the default motion papers on the party against whom the judgment is sought only if that party has "appeared personally or by a representative." Local Civ. R. 55.2(c), however, requires that the default motion papers be mailed to the last known residence or business address of all parties against whom default judgments are sought, "[u]nless otherwise ordered by the Court." The Committee Notes explains that, although Fed.R.Civ.P. 55(b) does not require this step when the defaulted defendant never appeared in the action, it is "conducive to both fairness and efficiency."
This was arguably a dictum, in that the default motion papers were mailed to Caruso at its last known address in London - as required by the Local Civ. R. 55.2(c) - but Caruso was "no longer located at [that] office address," and its registered agent in Liechtenstein "refused to accept delivery of the papers by Federal Express." Moskovitz, 2013 WL 6197163, at *1. Here, by contrast, there is no evidence of any mailing or other attempt by plaintiff to comply with Rule 55.2(c).
In this case, all three defendants were served with the summons and Complaint at the outset of the case, but failed to appear and defend. In addition, all three were served with Judge Engelmeyer's Order to Show Cause, which advised them that plaintiff had obtained certificates of defaults against each of them and moved for a default judgment, and warned them that they were required to act by July 28, 2020, if they wished to oppose the motion. Neither the Due Process Clause nor the Federal Rules of Civil Procedure requires more than this. Moskovitz, 2013 WL 6197163, at *3-4. Consequently, although plaintiff's failure to comply with Local Civ. R. 55.2(c) and with this Court's Scheduling Order should not go unrebuked, see infra at pp. 22-23, I will proceed to review her inquest submissions on the merits.
Because plaintiff did not request an evidentiary hearing, and I did not require one, my recommendation as to damages is based solely upon the written materials submitted by plaintiff. See Cement & Concrete Workers Dist. Council Welfare Fund v. Metro Found. Contractors, Inc., 699 F.3d 230, 234 (2d Cir. 2012) ("[A] district court may determine there is sufficient evidence either based upon evidence presented at a hearing or upon a review of detailed affidavits and documentary evidence."); Tamarin v. Adam Caterers, Inc., 13 F.3d 51, 53 (2d Cir. 1993) ("Rule 55(b)(2) of the Federal Rules of Civil Procedure . . . 'allows but does not require the district judge to conduct a hearing.'") (quoting Action S.A. v. Marc Rich & Co., 951 F.2d 504, 508 (2d Cir. 1991)).
B. Legal Standards
1. Determining Liability
Following a default, all well-pleaded factual allegations in the complaint as to liability are "deemed admitted." S.E.C. v. Razmilovic, 738 F.3d 14, 19 (2d Cir. 2013), as amended (Nov. 26, 2013); accord Mickalis Pawn Shop, 645 F.3d at 137; Vt. Teddy Bear Co., 373 F.3d at 246. However, a default "only establishes a defendant's liability if those allegations are sufficient to state a cause of action against the defendants." Gesualdi v. Quadrozzi Equip. Leasing Corp., 629 Fed.Appx. 111, 113 (2d Cir. 2015). The Court must therefore determine "whether the allegations in the complaint establish the defendants' liability as a matter of law." Id. (citing Finkel, 577 F.3d at 84). If the well-pleaded factual allegations establish the defaulting party's liability, the only remaining issue is "whether plaintiff has provided adequate support for [her requested] relief." Gucci Am., Inc. v. Tyrrell-Miller, 678 F.Supp.2d 117, 119 (S.D.N.Y. 2008) (citing Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999)).
Conversely, if the well-pleaded factual allegations in the complaint fail to state a claim upon which relief can be granted, no damages can be awarded, even if the post-default inquest submissions supply the missing information. See United States ex rel. Nat'l Dev. & Constr. Corp. v. U.S. Envtl. Universal Servs., Inc., 2014 WL 4652712, at *4 (S.D.N.Y. Sept. 2, 2014) ("[i]t is the . . . [c]omplaint, not the inquest submissions, that establishes defendants' liability") (quoting Gutman v. Klein, 2010 WL 4975593, at *10 (E.D.N.Y. Aug. 19, 2010)) (alterations in the original); J & J Sports Prods., Inc. v. Abdelraouf, 2019 WL 457719, at *2 (E.D.N.Y. Feb. 5, 2019) ("It is the moving party's burden to demonstrate that it is entitled to recovery based on the factual allegations pleaded in the complaint.").
2. Determining Damages
Although the Court must accept all well-pleaded facts as true when determining liability, it need not - and indeed cannot - rely on the allegations in plaintiff's pleading to establish her damages. Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). Rather, plaintiff is required to substantiate her damages claim with "admissible, authenticated evidence." McLaughlin v. Barron, 2018 WL 1872535, at *2 (S.D.N.Y. Jan. 24, 2018), report and recommendation adopted, 2018 WL 993627 (S.D.N.Y. Feb. 20, 2018); see also House v. Kent Worldwide Mach. Works, Inc., 359 Fed.Appx. 206, 207 (2d Cir. 2010) ("[T]here must be a basis upon which the court may establish damages with reasonable certainty.").
Where, as here, the defendants have failed to produce any employment records, the Court may credit the plaintiff's "recollections regarding [her] hours and pay in conducting its inquest." Coley v. Vannguard Urban Improvement Ass'n, Inc., 2018 WL 1513628, at *7 (E.D.N.Y. Mar. 27, 2018), as amended (Mar. 29, 2018). However, "the Court must ensure that [plaintiff's] approximations and estimates are reasonable and appropriate." Id.; see also Jemine v. Dennis, 901 F.Supp.2d 365, 378 (E.D.N.Y. 2012) (finding that plaintiffs' method of estimating hours worked by averaging the hours listed in the available payroll records with the hours recalled and described in plaintiffs' declarations was reasonable where defendants failed to maintain adequate records).
C. Jurisdiction and Venue
I am satisfied that this Court has subject matter jurisdiction over plaintiff's claims. Because plaintiff sues under a federal statute - the FLSA - subject matter jurisdiction is properly based on 28 U.S.C. § 1331. The Court may exercise supplemental jurisdiction over her state law claims, which arise out of the same facts and circumstances, pursuant to 28 U.S.C. § 1367.
I am also satisfied as to personal jurisdiction over the defendants, which is "a necessary prerequisite to entry of a default judgment." Reilly v. Plot Commerce, 2016 WL 6837895, at *2 (S.D.N.Y. Oct. 31, 2016) (quoting Sheldon v. Plot Commerce, 2016 WL 5107072, at *6 (E.D.N.Y. Aug. 26, 2016), report and recommendation adopted, 2016 WL 5107058 (E.D.N.Y. Sept. 19, 2016)). Defendants were properly served with process, see supra n.4, but failed to answer or otherwise respond, thereby waiving any argument regarding the Court's personal jurisdiction over them. See Fed.R.Civ.P. 12(h)(1)(B); Hamilton v. Atlas Turner, Inc., 197 F.3d 58, 62 (2d Cir. 1999). Similarly, defendants have waived any objections to venue. See Fed.R.Civ.P. 12(b)(3), 12(h)(1)(B).
D. Liability for Minimum Wage and Unpaid Overtime Violations
To state an FLSA wage claim, a plaintiff must allege: (1) that she was an employee of each defendant sued; (2) that she was "engaged in commerce" or employed by "an enterprise engaged in commerce," see 29 U.S.C. §§ 206(a), 207(a); and (3) that she "worked hours for which [she] did not receive minimum and/or overtime wages." Pineda v. Tokana Cafe Bar Restorant Inc., 2017 WL 1194242, at *2 (S.D.N.Y. Mar. 30, 2017) (citing Zhong v. August August Corp., 498 F.Supp.2d 625, 628 (S.D.N.Y. 2007)). NYLL wage claims involve a similar analysis, except that the NYLL "does not require a plaintiff to show that the employer was involved in interstate commerce or had $500,000 in minimum annual sales," as required under the FLSA, 29 U.S.C. § 203(s)(1)(A). Reyes v. Lincoln Deli Grocery Corp., 2018 WL 2722455, at *3 (S.D.N.Y. June 5, 2018) (citing Santillan v. Henao, 822 F.Supp.2d 284, 292 (E.D.N.Y. 2011)).
1. Employee-Employer Relationship
The FLSA defines "employer" as "any person acting directly or indirectly in the interest of an employer in relation to an employee." 29 U.S.C. § 203(d). The Supreme Court has emphasized that this is an expansive definition with "striking breadth." Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 326 (1992). Moreover, "[a]n individual may simultaneously have multiple 'employers' for the purposes of the FLSA, in which event, 'all joint employers are responsible, both individually and jointly, for compliance with all of the applicable provisions of the [FLSA].'" Martin v. Sprint United Mgmt. Co., 273 F.Supp.3d 404, 421 (S.D.N.Y. 2017) (quoting 29 C.F.R. § 791.2(a)).
To determine whether a plaintiff is an "employee" of a particular "employer" for FLSA purposes, courts examine the "economic reality" of the working relationship. Irizarry v. Catsimatidis, 722 F.3d 99, 104 (2d Cir. 2013). In the Second Circuit, courts examine four nonexclusive factors to assess the "economic reality" of an alleged employment relationship, including: "whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records." Id. at 105 (quoting Barfield v. N.Y. City Health & Hosps. Corp., 537 F.3d 132, 142 (2d Cir. 2008)). The inquiry considers the "totality of circumstances," so "no single factor is dispositive." Feng Chen v. Patel, 2019 WL 2763836, at *5 (S.D.N.Y. July 2, 2019).
Similarly, under the NYLL, the definition of "employer" is very broad, see NYLL § 190(3) ("employer" means "any person, corporation, limited liability company, or association employing any individual in any occupation, industry, trade, business or service"), and the crucial inquiry, in determining whether an employer-employee relationship exists, is the "degree of control exercised by the purported employer over the results produced or the means used to achieve the results." Hart v. Rick's Cabaret Int'l, Inc., 967 F.Supp.2d 901, 923 (S.D.N.Y. 2013) (citing Bynog v. Cipriani Grp., Inc., 1 N.Y.3d 193, 198, 802 N.E.2d 1090 (2003)). Although the New York Court of Appeals "has not yet answered the question of whether the test for 'employer' status is the same under the FLSA and the NYLL," Camara v. Kenner, 2018 WL 1596195, at *7 (S.D.N.Y. Mar. 29, 2018) (citing Irizarry, 722 F.3d at 117), "[t]here is general support for giving [the] FLSA and the New York Labor Law consistent interpretations . . . [a]nd there appears to have never been a case in which a worker was held to be an employee for purposes of the FLSA but not the NYLL (or vice versa)." Hart, 967 F.Supp.2d at 924 (internal citations omitted); see also Camara, 2018 WL 1596195, at *7 ("courts have assumed" that the test is the same under federal and New York law).
Plaintiff has adequately pleaded that she was employed by all three defendants for purposes of the FLSA and the NYLL. She alleges that defendants Moreno and Palma had "operational control" over the corporate defendant, through which they operated the Restaurant. Compl. ¶¶ 13, 26-27. Morena and Palma determined the wages and compensation of employees, established employee schedules, maintained employee records, and had the authority to hire and fire employees. Id. ¶¶ 26-27. These facts, taken as true for purposes of the inquest, meet the economic reality test under federal and state law. Moreover, by operating the Restaurant, defendants were "engaged in commerce."
2. Minimum Wage and Unpaid Overtime
While the federal minimum wage during plaintiff's employment at the Restaurant was (and remains) $7.25 per hour, the minimum wage in New York City under the NYLL was (and remains) $15 per hour for "large employers," defined as those with 11 or more employees. 29 U.S.C. § 206(a)(1), NYLL § 652(1)(a)(i). For smaller employers in New York City, the state minimum wage in 2019 was $13.50 per hour. NYLL § 652(1)(a)(ii). Under both federal and state law, an employer is required to pay an overtime rate of one and a half times the employee's "regular rate" of pay. 29 U.S.C. § 207(a)(1); N.Y. Comp. Codes R. & Regs. (NYCCR), tit. 12, § 146-1.4. To state an overtime claim, "a plaintiff must allege only that [she] worked compensable overtime in a workweek longer than forty hours, and that [she] was not properly compensated for that overtime." Tackie v. Keff Enterprises LLC, 2014 WL 4626229, at *3 (S.D.N.Y. Sept. 16, 2014) (citing Nakahata v. N.Y.-Presbyterian Healthcare Sys., Inc., 723 F.3d 192, 199-201 (2d Cir. 2013)).
Plaintiff Flores Garcia alleges that she was paid an hourly rate that started at $8.00 per hour and increased to $11.00 per hour by the end of her employment. Compl. ¶¶ 50-52. This was below the prevailing minimum wage for a New York City employer (of any size) in 2019, unless defendants permissibly took a "tip credit." The NYLL permits an employer to "take a credit towards the basic minimum hourly rate if a service employee or food service worker receives enough tips and if the employee has been notified of the tip credit as required in section 146-2.2 of this Part. Such employees shall be considered 'tipped employees. '" 12 NYCRR § 146-1.3. To take advantage of the "tip credit," however, an employer must provide a written notice explaining (and calculating) the credit, in English and the workers' primary language, and must keep the employee's signed acknowledgement of receipt of such notice for six years. Id. § 146-2.2 (a) & (c).
The FLSA, 29 U.S.C. § 203(m)(2)(A), also permits an employer to pay a tipped worker a cash wage lower than the statutory minimum wage, provided that the employee "has been informed by the employer of the provisions of this subsection," id., and the cash wage and the employee's tips, taken together, "are at least equivalent to the minimum wage." Inclan v. N.Y. Hosp. Grp., Inc., 95 F.Supp.3d 490, 497 (S.D.N.Y. 2015). "[W]hen 'an employee performs both tipped and untipped work, the question of whether an employer is entitled to apply a tip credit for minimum wage purposes turns on whether the employee spends more than twenty percent of his or her work week performing non-tipped work. If so, the employer is not entitled to apply a tip credit, and must pay that employee the full minimum wage.'" Gamero v. Koodo Sushi Corp., 272 F.Supp.3d 481, 500 (S.D.N.Y. 2017) (quoting Islam v. BYO Co. (USA), 2017 WL 2693717, at *4 (S.D.N.Y. June 20, 2017)), aff'd, 752 Fed.Appx. 33 (2d Cir. 2018).
Plaintiff Flores Garcia alleges that she was "never notified by Defendants that her tips were being included as an offset for wages." Compl. ¶ 55; see also id. ¶¶ 71-72. She also alleges that she spent more than 20% of her working time performing non-tipped work, including "cleaning the bathroom, washing the griller, grilling, making tortillas, tamales and tacos, refilling the vegetable buckets, cutting vegetables, sweeping and mopping[.]" Compl. ¶ 5; see also id. ¶¶ 10, 12, 38, 43. Thus, plaintiff has adequately alleged that was paid a hourly rate below the minimum wage required by New York law. However, her Complaint provides no information about the number of employees at the Restaurant. Nor is there any evidence on this point in her inquest submissions. Consequently, although her attorney's Damages Chart assumes that plaintiff was entitled to $15.00 per hour, I cannot. Instead, I will apply the $13.50 per hour minimum wage applicable to smaller New York City employers in 2019.
Plaintiff further alleges that she worked approximately 71 hours per week from the start of her employment through May 31, 2019, and approximately 53 hours per week from June 1, 2019 to August 19, 2019 (excluding two weeks in July), id. ¶¶ 47-48, and that during this time she was not paid any overtime premium for the hours she worked in excess of 40 hours per week. Compl. ¶¶ 6, 17. Thus, plaintiff has adequately stated a claim for unpaid overtime wages under the FLSA and the NYLL.
E. Statute of Limitations
The statute of limitations for claims under the FLSA is two years, see 29 U.S.C. § 255(a), unless the violations were "willful," in which case the limitations period increases to three years. Id. The statute of limitations for claims under the NYLL is six years, regardless of willfulness. See NYLL § 198(3). Plaintiff filed her Complaint on October 14, 2019 - less than nine months after the start of her employment at the Restaurant. Therefore, all of her FLSA and NYLL claims are timely, regardless of willfulness.
F. Damages
1. Compensatory Damages
Plaintiff has submitted admissible evidence, in the form of her own sworn declaration, supporting her claims for unpaid minimum and overtime wages. Plaintiff attests that throughout her employment at the Restaurant she consistently worked more than 40 hours per week, at an hourly wage below the $13.50 minimum required by the NYLL, and that she never received overtime pay. Flores Garcia Decl. ¶¶ 14-20; 27; 31.Plaintiff further attests that she was never notified that her tips were being included as an offset for wages, id. ¶ 23, and in any event spent "a significant portion of my work day performing non-tipped, non-delivery duties." Id. ¶ 10.
Plaintiff also attests that for "approximately seven weeks" during her employment, defendants did not pay her at all. Flores Garcia Decl. ¶ 21. However, she does not specify which dates she went without pay (or whether she was ultimately paid for those weeks), and does not include any additional damages, for those seven weeks, in her Damages Chart. It thus appears that she does not seek to recover her alleged lost wages for the weeks she says she went without pay.
Although plaintiff is eligible to recover damages - at least for her unpaid overtime - under both the FLSA and the NYLL, she "may not recover twice." Gonzalez Mercedes, 2018 WL 7291452, at *5 (quoting Cao v. Wu Liang Ye Lexington Rest., Inc., 2010 WL 4159391, at *3 (S.D.N.Y. Sept. 30, 2010)). Rather, plaintiff "may recover under the statute which provides the greatest amount of damages." Id. (quoting Wicaksono v. XYZ 48 Corp., 2011 WL 2022644, at *3 (S.D.N.Y. May 2, 2011), report and recommendation adopted, 2011 WL 2038973 (S.D.N.Y. May 24, 2011)). In this case, that statute is the NYLL. Consequently, for the first forty hours she worked each week, plaintiff is entitled to recover the difference between her actual hourly rate and $13.50. For her hours in excess of forty, she is entitled to the difference between her actual hourly rate and $20.25 (1.5 times $13.50).
From February 27, 2019 until around May 2019, plaintiff worked from approximately 11:30 p.m. to 10:00 a.m. two days a week and from approximately 11:30 p.m. to 12:00 noon four days a week, for an average of 71 hours per week. Flores Garcia Decl. ¶ 15. From February 27, 2019 until approximately March 15, 2019, she was paid $8.00 per hour. Id. ¶ 18. From approximately March 15, 2019 until approximately April 30, 2019, she was paid $10.00 per hour. Id. ¶ 19. From approximately May 1, 2019 to May 31, 2019, plaintiff was paid $11.00 per hour. Id. ¶ 20. Because she should have been paid $13.50 per hour for the first 40 hours of work and $20.25 (1.5 times $13.50) for her overtime hours, plaintiff is owed $5,950.75 in backpay for this period.
$1,199.50 for February 27 to March 15; $3,204.25 for March 15 to April 30; and $1,547 for May 1 to May 30, 2019.
For the nine weeks between June 1, 2019 until around August 19, 2019, plaintiff worked from approximately 1:00 a.m. to approximately 10:00 a.m. one day a week and from approximately 1:00 a.m. to around 12:00 noon four days a week, for an average of 53 hours per week (except for two weeks in July). Flores Garcia Decl. ¶ 16. Her pay during this period was $11.00 per hour. Id. ¶ 20. Because she should have been paid $13.50 per hour for the first 40 hours of work and $20.25 (1.5 times $13.50) for her overtime hours, plaintiff is owed $1,541.75 in backpay for this period.
Thus, plaintiff is owed a total of $7,492.50 in unpaid minimum and overtime wages for the duration of her employment with defendants.
2. Liquidated Damages
Plaintiff requests liquidated damages in the amount of 100% of her actual unpaid wages. Prop. Findings ¶¶ 29, 39-43; Faillace Decl. ¶¶ 63-66; Damages Chart at 2. Under the NYLL, an employer is liable for liquidated damages equal to the full amount of the plaintiff's unpaid wages, including any unpaid overtime, unless the employer can demonstrate that it acted in "good faith." NYLL § 198(1-a). Because a showing of good faith is an affirmative defense under the NYLL, a defaulting defendant cannot carry that burden. See Tackie, 2014 WL 4626229, at *4 (citing Jaramillo v. Banana King Rest. Corp., 2014 WL 2993450, *5 (E.D.N.Y. July 2, 2014)). Thus, plaintiff is entitled to 100% of her unpaid minimum wage and overtime damages as liquidated damages, equivalent to $7,492.50.
3. Spread of Hours Pay
Under NYLL, an employee paid the minimum wage (or less) is entitled to an extra hour of pay at the minimum rate for each day in which the "spread of hours," or the "length of the interval between the beginning and end of [her] workday" (including "working time plus time off for meals plus intervals off duty") is greater than ten hours. NYLL § 144-1.6. Plaintiff attests that she consistently worked shifts of greater than ten hours. Flores Garcia Decl. ¶¶ 15-16. She requests $1,710 in unpaid "spread of hours" pay, equivalent to the number of days she worked shifts longer than ten hours (114), multiplied by the basic hourly minimum wage of $15.00. Prop. Findings ¶ 37; Faillace Decl. ¶ 7; Damages Chart at 2-3. However, as discussed above, plaintiff has not shown that any defendant was a "large employer" and consequently is only entitled to $13.50 per hour. Under NYLL § 198(1-a), plaintiff is also entitled to receive liquidated damages in the amount equal to 100% of her unpaid spread of hours pay. Zhen Ming Chen v. Y Cafe Ave B Inc., 2019 WL 2324567, at *4 (S.D.N.Y. May 30, 2019). Therefore, plaintiff should receive $1,590.00 in spread of hours damages, and an equal sum in liquidated damages, for a total of $3,180.
4. Statutory Penalties
The NYLL requires employers to provide a written statement "with every payment of wages" that includes, among other things, the dates worked during that pay period, the rate or rates of pay and the basis thereof, gross wages, deductions, allowances, and net wages. NYLL § 195(3). Additionally, "at the time of hiring," employers must provide a written wage notice - in English and in the employee's "primary language" - that includes, 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 any "allowances, if any, claimed as part of the minimum wage," including tip allowances. NYLL § 195(1). A new wage notice must be furnished each time there are any "changes to the information set forth in subdivision one" (such as when an employee is given a raise), unless the changes are "reflected on the wage statement furnished in accordance with subdivision three." NYLL § 195(2). An employee may recover statutory damages of $250 for each workday that her employer failed to provide the wage statement required by § 195(3), and $50 for each workday that her employer failed to provide the wage notice required by § 195(1), not to exceed damages of $5,000 for each violation. NYLL § 198(1-b), (1-d).
Plaintiff attests defendants never provided the required wage statements or wage notices. Flores Garcia Decl. ¶¶ 28-30. Because plaintiff worked for more than 100 days, she is entitled to the maximum statutory damages permitted: $5,000 for each of the two violations, for a total of $10,000 in statutory damages.However, no liquidated damages may be awarded with respect to that sum. Ge Chun Wen v. Hair Party 24 Hours Inc., 2021 WL 3375615, at *11 (S.D.N.Y. May 17, 2021), report and recommendation adopted sub nom. Wen v. Hair Party 24 Hours Inc., 2021 WL 2767152 (S.D.N.Y. July 2, 2021); Martinez v. Alimentos Saludables Corp., 2017 WL 5033650, at *23 & n.13 (E.D.N.Y. Sept. 22, 2017).
The award for a violation of § 195(3) is mandatory, while the award for a violation of § 195(1) is permissive. Pugh v. Meric, 2019 WL 2568581, at *2 (S.D.N.Y. June 20, 2019). "Nonetheless, in light of [defendants'] default, and the complete failure to provide any explanation for [their] violation of the statute, the maximum of $5,000.000 should be awarded" for each violation. Gomez v. NYHS Design Inc., 2022 WL 4284143, at *4 (S.D.N.Y. Sept. 16, 2022), report and recommendation adopted, 2022 WL 6175174 (S.D.N.Y. Oct. 6, 2022).
5. Prejudgment Interest
In addition to liquidated damages, plaintiffs may recover prejudgment interest on their unpaid minimum and overtime wages under NYLL § 198(1-a). Andrade v. 168 First Ave Rest. Ltd., 2016 WL 3141567, at *10 (S.D.N.Y. June 3, 2016), report and recommendation adopted, 2016 WL 3948101 (S.D.N.Y. July 19, 2016) (citing Reilly v. Natwest Mkts. Grp. Inc., 181 F.3d 253, 265 (2d Cir. 1999)). This is because liquidated damages are considered punitive, while prejudgment interest "compensate[s] a plaintiff for the loss of use of money." Reilly, 181 F.3d at 265 (quoting Chandler v. Bombardier Capital Inc., 44 F.3d 80, 83 (2d Cir. 1994)).
"[P]rejudgment interest applies only to the amount of compensatory damages, and excludes the amount of liquidated damages." Xochimitl v. Pita Grill of Hell's Kitchen, Inc., 2016 WL 4704917, at *18 (S.D.N.Y. Sept. 8, 2016), report and recommendation adopted, 2016 WL 6879258 (S.D.N.Y. Nov. 21, 2016) (quoting Maldonado v. La Nueva Rampa, Inc., 2012 WL 1669341, at *11 (S.D.N.Y. May 14, 2012)). Similarly, prejudgment interest may not be awarded with respect to statutory damages under NYLL § 198(1-b) or (1-d). See Pastor v. Alice Cleaners, Inc., 2017 WL 5625556, at *6 (S.D.N.Y. Nov. 21, 2017) ("Pre-judgment interest applies only to the actual, compensatory damages, and not to liquidated damages or to damages recovered due to violations of wage statement or wage notice provisions.")
New York's prejudgment interest rate is 9% per annum, see CPLR § 5004, and is computed "on a simple interest basis." Marfia v. T.C. Ziraat Bankasi, 147 F.3d 83, 90 (2d Cir. 1998). "Where such damages were incurred at various times, interest shall be computed upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date." CPLR § 5001(b); see also Marfia, 147 F.3d at 91 ("New York law leaves to the discretion of the court the choice of whether to calculate prejudgment interest based upon the date when damages were incurred or 'a single reasonable intermediate date,' which can be used to simplify the calculation."). In NYLL cases, courts often calculate prejudgment interest from the midpoint of the plaintiff's employment. See Gunawan v. Sake Sushi Rest., 897 F.Supp.2d 76, 93 (E.D.N.Y. 2012) (collecting cases). The median date of the period for which plaintiff Flores Garcia is owed damages is May 24, 2019. Interest has been accruing since that date at the rate of $2.24 per day ($9,082.50 multiplied by 0.09 and divided by 365), and will continue to accrue, at the same rate, until judgment is entered.
G. Attorneys' Fees and Costs
Both the FLSA and the NYLL allow a successful plaintiff to recover reasonable attorney's fees. 29 U.S.C. § 216(b); NYLL §§ 198, 663. To determine a "presumptively reasonable fee," the court multiplies the hours counsel reasonably spent on the litigation by a reasonable hourly rate. Millea v. Metro-North R. Co., 658 F.3d 154, 166 (2d Cir. 2011) (citing Arbor Hill Concerned Citizens Neighborhood Assoc. v. Cnty. of Albany, 522 F.3d 182, 183 (2d Cir. 2008)). "The presumptively reasonable fee boils down to 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." Simmons v. New York City Transit Auth., 575 F.3d 170, 174 (2d Cir. 2009) (internal quotations omitted). "In determining whether an hourly rate is reasonable, the Second Circuit has observed that the court should apply the prevailing rate within the district for similar services by lawyers of comparable experience and skill." Galeana v. Lemongrass on Broadway Corp., 120 F.Supp.3d 306, 323 (S.D.N.Y. 2014) (citing Gierlinger v. Gleason, 160 F.3d 858, 882 (2d Cir. 1998)).
Here, plaintiff was represented throughout the active phase of this litigation by Michael Faillace, who was suspended from practice in this District, as of November 9, 2021, due to "repeatedly taking fees from settlements in excess of the amounts awarded to him by court order (effectively stealing from his clients' recoveries); refusing to follow client directions as to the amounts they wanted to settle the case; and . . . misrepresenting facts relating to these practices to the Southern District Committee." Victor v. Sam's Deli Grocery Corp., 2022 WL 3656312, at *14-15 (S.D.N.Y. Aug. 25, 2022) (quoting Garcia Lazaro v. Best Fish Mkt. Corp., 2022 WL 280768, at *2 (E.D.N.Y. Jan. 29, 2022). In both of these cases, the court denied fees to Faillace after his suspension, finding that "[f]ew 'reasonable, paying clients' are going to retain an attorney who is going to be suspended for, among other things, stealing settlements from clients." Victor, 2022 WL 3656312, at *15 (quoting Garcia Lazaro, 2022 WL 280768, at *3). I agree.
Even if attorney Faillace were still in good standing in this District, I would recommend that no fees be awarded in this case, because it was the responsibility of plaintiff's counsel to mail her default judgment motion papers and inquest materials to the defendants in compliance with Local Civ. P. 55.2(c) and the Scheduling Order. Having failed to comply with these basic obligations - and thereby risked forfeiting any judgment in plaintiffs favor - counsel is not entitled to fees. See Fed.R.Civ.P. 16(f)(1) (court may issue "any just orders" if a party "or its attorney" fails "obey a scheduling or other pretrial order").
III. CONCLUSION
For the reasons set forth above, I respectfully recommend that plaintiff be awarded damages in the aggregate amount of $28,165 against defendants, jointly and severally, comprising (a) $7,492.50 in compensatory damages for defendants' failure to pay the minimum and overtime wages required by state law, (b) $7,492.50 in liquidated damages for the wage violations, (c) $1,590 for defendants' failure to provide spread of hours pay under state law, (d) $1,590 in liquidated damages for the spread of hours violations, and (e) $10,000 in statutory damages for defendants' failure to provide the wage statements and notices required under state law, plus prejudgment interest in the amount of $2.24 per day from May 24, 2019 to the date of entry of final judgment.
In light of the failure of plaintiff's counsel to mail copies of plaintiff's default motion papers and inquest submissions to the defendants as directed, I will direct that those materials be mailed to them now, along with a copy of this Report and Recommendation, so that they may review the relevant record when deciding whether to object to my recommendations.
The Clerk of Clerk is respectfully directed to mail copies of this Report and Recommendation, as well as the papers at Dkts. 32, 33, 36, 38, 41, and 42, to the defaulted defendants, addressed as follows:
Grocery-Tacqueria Mexicana Corp.
Raul Saavedra Moreno
Ana Maria Pantle Palma c/o Grocery La Tacqueria Mexicana
118 East 183d Street
Bronx, NY 10453
NOTICE OF PROCEDURE FOR FILING OF OBJECTIONS TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen days from the service of this report and recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. See also Fed.R.Civ.P. 6(a), (d). 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). Any such objections shall be filed with the Clerk of the Court, with courtesy copies delivered to the Hon. Jennifer L. Rochon at the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York, New York 10007. Any request for an extension of time to file objections must be directed to Judge Rochon. Failure to file timely objections will result in a waiver of such objections and will preclude appellate review. See Thomas v. Arn, 474 U.S. 140, 155 (1985); Frydman v. Experian Info. Sols., Inc., 743 Fed.Appx. 486, 487 (2d Cir. 2018) (summary order); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).