Opinion
14-CV 4771 (GRB)(SIL)
2021-12-10
Trinidad GONZALEZ, et al., individually and on behalf of others similarly situated, Plaintiffs, v. ALLIED CONCRETE INDUSTRIES, INC., Allied Concrete Structures, Inc. Americo Magalhaes, and Manuel Magalhaes, Defendants.
Scott A. Wolinetz, Scott A. Wolinetz, P.C., New York, NY, for Plaintiffs.
Scott A. Wolinetz, Scott A. Wolinetz, P.C., New York, NY, for Plaintiffs.
MEMORANDUM OF DECISION & ORDER
GARY R. BROWN, United States District Judge:
In this class action brought pursuant to the Fair Labor Standards Act and the New York Labor Law, pending for more than seven years, plaintiffs again move for partial summary judgment, having prevailed on class certification and a partial summary judgment motion four and a half years ago. On this application, plaintiffs make the rather unremarkable request that Judge Bianco's determinations concerning defendants’ failures to provide adequate wage notices and wage statements be extended to the entire class, and that damages be awarded consistent with such order. Plaintiffs also seek an award of damages in connection with the participation of certain class members in a "banked" overtime system which resulted in untimely underpayments for overtime work. For the reasons that follow, plaintiffs’ motion is granted in substantial measure to the extent set forth herein.
Summary Judgment Standard
This motion for partial summary judgment is decided under the oft-repeated and well-understood standard for review for these matters, as discussed in Bartels v. Inc. Vill. of Lloyd Harbor , 97 F. Supp. 3d 198, 211-12 (E.D.N.Y. 2015), aff'd , 643 F. App'x 54 (2d Cir. 2016), which discussion is incorporated by reference herein. In sum, the question before the Court is whether, based upon the undisputed or improperly disputed facts, the plaintiffs are entitled to partial summary judgment. Moreover, as this Court has previously held:
[T]o oppose a motion for summary judgment, a party is required by the Court's Local Rules to submit a Statement of Material Facts upon which it contends there "exists a genuine issue to be tried" and "each statement controverting any statement of material fact ... must be followed by citation to evidence which would be admissible, set forth as required by Fed. R. Civ. P. 56(c)." L. Civ. R. 56(d) ; Tuccio v. FJC Sec. Servs., Inc. , No. CV 12-5506(JFB)(GRB), 2014 WL 4438084, at *5 (E.D.N.Y. Aug. 18, 2014), adopted by , 2014 WL 4438469 (E.D.N.Y. Sept. 8, 2014), appeal dismissed , (2d Cir. Mar. 18, 2015). A party may not rest on a mere denial without citing supporting admissible evidence. "Merely denying certain statements in the moving party's statement of undisputed material facts without stating the factual basis for such denial and without disclosing where in the record is the evidence relied upon in making such denial does not constitute a ‘separate, short, and concise statement of the material facts as to which it is contended that there exists a genuine issue to be tried’—as is required to controvert the moving party's statement of undisputed material facts." Covelli v. Nat'l Fuel Gas Distrib. Corp. , No. 99-CV-0500E( ), 2001 WL 1823584, at *1 (W.D.N.Y. Dec. 6, 2001) (citing Holtz v. Rockefeller & Co. , 258 F.3d 62, 74 (2d Cir. 2001) ), aff'd, Covelli v. Nat'l Gas Distrib. Corp. , 49 F. App'x 356 (2d Cir. 2002).
Upon the failure to properly controvert a movant's statement of material fact,
such statement "will be deemed admitted for the purposes of the motion." L. Civ. R. 56.1(c); D.N. ex rel. D.N. v. Bd. of Educ. of Ctr. Moriches Union Free Sch. Dist. , No. CV 14-99(GRB), 2015 WL 5822226, at *3 n.3 (E.D.N.Y. Sept. 28, 2015) ; see also Edmonds v. Seavey , No. 08 CIV. 5646 (HB), 2009 WL 2949757, at *1 n.2 (S.D.N.Y. Sept. 15, 2009), aff'd, 379 F. App'x 62 (2d Cir. 2010) ; AFL Fresh & Frozen Fruits & Vegetables, Inc. v. De-Mar Food Servs. Inc. , No. 06 Civ. 2142(GEL), 2007 WL 4302514, at *5 (S.D.N.Y. Dec. 7, 2007). Again, district courts have "broad discretion to determine whether to overlook a party's failure to comply with local court rules," Holtz , 258 F.3d at 73, and the Court may not rely solely upon the failure to controvert assertions made in a Rule 56.1 statement if those assertions are not supported in the record. See Giannullo [v. City of N.Y. , 322 F.3d 139, 140 (2d Cir. 2003) ] ("[E]ven though plaintiff's Rule 56.1 counter-statement failed to specifically controvert these assertions, the unsupported assertions must nonetheless be disregarded and the record independently reviewed."); but see Jackson v. Fed. Express , 766 F.3d 189, 196 (2d Cir. 2014) (distinguishing Giannullo and upholding default where "each statement of proposed undisputed facts was supported by a citation to the record sufficient to prove each such fact").
Davis v. Town of Hempstead , 14-CV-903 (JMA)(GRB), 2019 WL 235644, at *3 (E.D.N.Y. 2019).
The Effect of Defendants’ Failure to Maintain Adequate Records
In this case, it is beyond dispute that the defendants, in many instances, failed to keep adequate payroll and employment records and, in certain instances, failed to keep records at all. The effect of these omissions and failures are clear. As one court held:
The FLSA requires an employer to "make, keep, and preserve" records of employee wages, hours, and employment conditions. 29 U.S.C. § 211(c). Under the FLSA, "[w]hen an employer fails to maintain accurate and complete records of the hours employees work and the amounts they are paid, the plaintiff-employee need only ... submit ‘sufficient evidence from which violations of the [FLSA] and the amount of an award may be reasonably inferred.’ " Gonzalez v. Masters Health Food Serv. Inc. , No. 14 Civ. 7603 (VEC), 2017 WL 3835960, at *16 (S.D.N.Y. July 27, 2017) (quoting Reich v. S. New Eng. Telecomms. Corp. , 121 F.3d 58, 66 (2d Cir. 1997) ). An employee discharges his burden at this first step "if [she] ... can prove that [she] ‘in fact performed work for which [she] was improperly compensated and if [she] produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference.’ " Hernandez v. JRPAC Inc. , No. 14 Civ. 4176(PAE), 2016 WL 3248493, at *27 (S.D.N.Y. June 9, 2016) (quoting [ Anderson v. Mt. Clemens Pottery Co. , 328 U.S. 680, 687, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946) ]). "This burden is ‘not high’ and may be met ‘through estimates based on [the employee's] own recollection.’ " Id. (quoting Kuebel v. Black & Decker Inc. , 643 F.3d 352, 362 (2d Cir. 2011) ).
If an employee makes this showing, "[t]he burden then shifts to the employer to come forward [i] with evidence of the precise amount of work performed or [ii] with evidence to negative the reasonableness of the inference to be drawn from the employee's evidence." JRPAC , 2016 WL 3248493, at *27 (quoting
Mt. Clemens Pottery Co. , 328 U.S. at 687-88, 66 S.Ct. 1187 ). "If the employer fails to produce such evidence, the court may then award damages to the employee, even though the result may be only approximate." Gonzalez , 2017 WL 3835960, at *16 (quoting Mt. Clemens Pottery Co. , 328 U.S. at 688, 66 S.Ct. 1187 ).
"A similar standard applies to unpaid compensation claims under [the] NYLL." Gonzalez , 2017 WL 3835960, at *16 (citing Canelas v. World Pizza, Inc. , No. 14 Civ. 7748 (ER), 2017 WL 1233998, at *9 (S.D.N.Y. Mar. 31, 2017) ; NYLL § 196-a(a) ); see Garcia v. JonJon Deli Grocery Corp. , No. 13 Civ. 8835 (AT), 2015 WL 4940107, at *4 n.8 (S.D.N.Y. Aug. 11, 2015) ("Courts use the same burden-shifting framework to determine liability for unpaid overtime under the NYLL [and the FLSA]."). But under the NYLL, an employer who fails to keep accurate records shoulders a more stringent burden of proof: "NYLL § 196-a provides that where an employer fails to ‘keep adequate records or provide statements of wages to employees as required’ by the statute, the employer ‘shall bear the burden of proving that the complaining employee was paid wages, benefits and wage supplements.’ " Canelas , 2017 WL 1233998, at *9 (quoting NYLL § 196-a(a) ); see generally Gamero v. Koodo Sushi Corp. , 272 F. Supp. 3d 481, 497 (S.D.N.Y. 2017) (discussing the FLSA and NYLL burden-shifting frameworks where an employer's payroll records are inaccurate or incomplete), aff'd , 752 F. App'x 33 (2d Cir. 2018) (summary order). "By its terms, the NYLL — unlike the FLSA — does not permit an employer to discharge this burden by undermining the reasonableness of an employee's evidence that [she] was underpaid." Id. at 498. In contrast, the NYLL requires that an employer demonstrate by a preponderance of the evidence that it in fact paid its employees "wages, benefits and wage supplements." NYLL § 196-a(a) ; see JRPAC , 2016 WL 3248493, at *36. And "[i]f an employer cannot satisfy its burden under the FLSA, it cannot satisfy th[is] ‘more demanding burden’ of the NYLL." Canelas, 2017 WL 1233998, at *9 (quoting Doo Nam Yang v. ACBL Corp. , 427 F. Supp. 2d 327, 337 n.15 (S.D.N.Y. 2005) ).
Chichinadze v. BG Bar Inc. , 517 F. Supp. 3d 240, 252–53 (S.D.N.Y. 2021). These principles prove of significant assistance in resolving the pending motions.
DISCUSSION
Liability
This decision must begin (and to a certain degree end) with Judge Bianco's detailed oral decision granting the motion for class certification and partial summary judgment. Regarding the "banking" system that defendants implemented for employees’ overtime hours, Judge Bianco found:
The first question is whether defendant's policy of paying employees who worked overtime a payment of 40 hours worth of straight pay and 50 percent of their pay for their overtime hours at some later time paying them straight pay for those overtime hours violates the FLSA or New York Labor Law. Under federal regulations dealing with the FLSA "[t]he general rule is that overtime compensation earned in a particular workweek must be paid on the regular payday for the period in which such work weekends." 29 CFR Section 778.106. The only exception to that rule applies when "the correct amount of overtime compensation cannot be determined until sometime after the regular pay period[.]" But even when that exception applies, employers are required to pay the excess overtime compensation
"as soon after the regular pay period as is practicable." Thus, pursuant to these regulations, defendant's overtime banking policy depending upon the extent to which and how it was used had the potential to violate the FLSA. The same is true of the New York Labor Law which requires the employees to pay overtime according to the manner and methods provided in the FLSA. 12 NYCRR Sections 142-2.2 and 3.2.
DE 188 at 15. Based on the undisputed facts, Judge Bianco then made the following four determinations:
Defendants Violated the Fair Labor Standards Act ... and New York Labor Law by banking plaintiffs’ overtime hours. Two, that individual defendant Americo Magalhaes is the individual employer under the FLSA and New York Labor Law. Three, that defendants Concrete and Allied Concrete operated as an integrated enterprise and thus are a single employer under the FLSA and New York Labor Law. And four, that defendants failed to provide wage notices and proper wage statements under New York Labor Law Section 195, Subsection 1 and 3. Defendants did not address the last three issues in their opposition papers and at oral argument they were conceded. In any event, the Court finds the uncontroverted evidence supports the conclusion with respect to those last three issues that the motion should be granted based upon the uncontroverted facts.
In light of these unambiguous holdings, defendants’ contentions concerning which employees worked for which entity, as well as whether the individual defendant was an employer, border on frivolity. See, e.g. , DE 209-1 ¶¶2-4, 6.
Id. at 14; cf. id. at 21 ("the defendants violated the FLSA and New York Labor Law by banking overtime hours with respect to the plaintiffs."). Importantly, in reaching these determinations, Judge Bianco rejected several of defendants’ arguments, which have, to some degree, been recycled on this motion. For example, Judge Bianco rejected a defense to liability predicated upon the absence of evidence relating to the amount of damages. Id. at 17-18. Moreover, claims of good faith and "technical" violation of the statute were also found inapposite to the question of liability, though Judge Bianco noted that these issues might go to damages. Id. at 19-20.
Therefore, insofar as plaintiffs seek to extend these liability determinations to the class, the matter is easily dispatched. Defendants have raised nothing, either in terms of argument or disputed fact, that would prevent extension of Judge Bianco's carefully considered determinations to the class. Hence, the motion for partial summary judgment is granted on questions of liability for "banking" overtime hours which were paid at a later date and failure to provide wage notices and proper wage statements under NYLL §§ 195(1) and 195(3). Based upon the undisputed facts, defendants’ acts and omissions represent actionable violations of the statutory provisions as to class members. Thus, the motion for partial summary judgment is granted in this regard.
Damages for Wage Notice and Wage Statement Violations
Defendants raise only one defense to damages on the notice and statement violations: under NYLL § 195(3), defendants contend that they made "complete and timely payments of all wages due," which may, under certain circumstances, constitute an affirmative defense to the wage notice and statement claims. DE 209-8 at 12-13. Defendants concede, as they must, that they did not provide adequate wage notices and statements and, for all practical purposes, they cannot prove "timely" payments as to plaintiffs who participated in the banked overtime system. DE 209-8 at 12.
Plaintiffs correctly argue that defendants failed to properly plead this defense in their answer. However, because Judge Bianco implicitly ruled that defendants could raise this question in the context of damages, DE 188 at 21, it seems unfair to preclude this argument at this juncture.
There appears to remain a dispute as to whether participants in the banked hours scheme received only straight-time pay for overtime hours.
Faced with this litigation position, plaintiffs provided an expert recalculation of the statutory damages for wage statement and notice violations as applied only to those plaintiffs who participated in the banked overtime system. DE 210-1 at 4; cf. DE 210-3 at 12. Plaintiffs seek an award of partial summary judgment in the amount of $183,693 under NYLL § 195(1) and $107,750 under NYLL § 195(3), exclusive of interest. DE 210-1 at 4. Defendants offer no meaningful opposition to this application. Therefore, the Court hereby orders partial summary judgment in the amounts specified, plus pre- and post-judgment interest.
These figures – limited only to identified class members – were also adjusted to account for other variables, including the effective date of the enactment of the statutory defense relied upon by defendants.
Defendants claim that plaintiffs’ proof fails regarding when certain employees were, in fact, employed by defendants. The support for this notion is the very generalized statement by one defendant that following the recession, defendants’ workforce was substantially reduced in size. DE 209-8 at 8. As discussed in detail above, it is well established that a failure of an employer to keep legally required records must be construed against the employer. The question of the period in which a particular class member was employed presents a slightly more nuanced question in the absence of records. Thus, as an additional safeguard, as part of the distribution process, each class member must either provide records demonstrating the period of their employment or sign a sworn declaration attesting to the approximate dates of their employment, and any recovery by such class member should be adjusted accordingly. Like other similar issues, this requisite may be satisfied "through estimates based on [the employee's] own recollection." Kuebel , 643 F.3d at 362.
This additional requirement explains the award of "up to" the relevant figures set forth below. Counsel will have to work together in a reasoned and cooperative manner. This is a fee-shifting case, and unreasonable positions taken by either side could necessarily affect future determinations in this regard.
This determination leaves the question of whether statutory damages for wage notice and statement violations must be paid to class members that are outside the banked overtime group. This question may turn, in part, as to whether the non-banked plaintiffs were not paid completely and timely – for example, plaintiffs allege that defendants failed to pay shop and travel time. This issue cannot be resolved on the current record and must await additional litigation.
Banked Overtime Damages
There remains a factual question as to whether the banked overtime plaintiffs were paid time and a half for overtime, or simply received straight time at a later date. However, there is no factual dispute that the banked hours worked were not timely paid – meaning that these plaintiffs received the "straight time" portion of their overtime pay well after such pay was due. As such, plaintiffs are seeking, on this motion, only liquidated damages equal to 100% of the delayed straight time payments made after the amendment of the NYLL in 2011 and 25% of such payments made before such amendment.
Admittedly, the evidence that defendants paid the extra half-time appears extraordinarily thin – though it appears sufficient to survive a motion for summary judgment. See DE 56.
For methodological reasons that are not entirely clear, defendants challenge the inclusion of 32 class members in the banked overtime group. Plaintiffs again submitted an amended expert calculation excluding those class members for the purpose of this motion. DE 210-1 at 3; cf. DE 210-3 at 12. The Court hereby grants partial summary judgment as to the banked overtime class members in the revised sum sought, to wit: $137,142, excluding accrued interest, which represents straight-time liquidated damages for the banked overtime class members for the 2013-17 period.
Finally, defendants’ half-hearted, eleventh hour effort to decertify the class requires no response by the Court.
CONCLUSION
Based on the foregoing, it is hereby ORDERED as follows:
1. Consistent with the parameters set forth in this opinion, the Court awards partial summary judgment as follows:
a. Judge Bianco's previous liability findings are extended to the class;
b. Defendants are to pay the appropriate class members damages as follows:
i. Up to $183,693 under NYLL § 195(1), plus pre- and post-judgment interest;
ii. Up to $107,750 under NYLL § 195(3), plus pre- and post-judgment interest; and
iii. A total of $137,142, plus pre and post-judgment interest to the banked overtime class members for the 2013-17 period.
2. Within thirty days, counsel is to file a stipulated proposed order for the payment and distribution of the above sums, and
3. As this matter has been pending for a substantial amount of time, counsel is to file, within thirty days of the date of this order, a joint plan for resolution of the balance of this case, specifying whether there is a need for continued litigation and, if so, specifying the remaining matters that need to be resolved along with a detailed schedule for doing so.