Opinion
20-CV-04477 (GBD)(SN)
05-04-2023
HILARIO MICULAX MICULAX, et al., Plaintiffs, v. LA FONDA BORICUA LOUNGE, INC., et al., Defendants.
REPORT AND RECOMMENDATION
SARAH NETBURN, UNITED STATES MAGISTRATE JUDGE.
TO THE HONORABLE GEORGE B. DANIELS:
Hilario Miculax Miculax and Luis Panzeis (the “Plaintiffs”) sued La Fonda Boricua Lounge, Inc., Jorge Ayala, and Jeremias Doe (the “Defendants”) after they allegedly failed to pay Plaintiffs' minimum and overtime wages, as required by the Fair Labor Standards Act (“FLSA”) and New York Labor Law (“NYLL”). Plaintiffs also allege violations of various other NYLL provisions. The Honorable George B. Daniels entered a default against the Defendants and ordered an inquest on damages. Plaintiffs filed a Proposed Findings of Fact and Conclusion of Law and a motion for attorneys' fees and costs. Defendants are liable for violating overtime wage provisions of the FLSA and NYLL, failing to provide spread-of-hours pay, and failing to comply with the NYLL's wage notice and statement requirements. I recommend Plaintiffs be awarded a total of $437,088.46, plus all applicable interest.
BACKGROUND
Plaintiffs Hilario Miculax Miculax and Luis Panzeis filed a complaint on June 11, 2020, seeking monetary damages arising out of Defendants' FLSA and NYLL violations. ECF No. 1.
Subsequently, Plaintiffs filed a First Amended Complaint to include La Fonda Restaurant and Tapas Bar Inc., and later, a Second Amended Complaint to provide Jeremias Doe's full legal name-James Gonzales. ECF No. 32 (“Compl.”).
Defendants employed Miculax as a food preparer, dishwasher, and cook from approximately October 10, 2016, until March 20, 2020. Compl. at ¶¶ 36-37. Defendants employed Panzeis as cook from approximately October 1, 2018, until March 21, 2020. Compl. at ¶¶ 57-58. Defendants willfully and knowingly denied Plaintiffs overtime compensation, spread-of-hours pay, and failed to provide Plaintiffs with required notice and wage statements. Compl. at ¶¶ 76-87.
Plaintiffs seek damages for unpaid minimum wage and overtime compensation as well as for Defendants' failure to provide an accurate paystub, spread-of-hours pay and other violations under NYLL as applicable. Id. at ¶¶ 34-45. Plaintiffs claim they are entitled to liquidated damages, pre-judgment and post-judgment interest, reimbursement for expenses incurred in this action, and attorneys' fees and costs. Id. at ¶¶ 46-56. Plaintiffs filed affidavits of service of their Second Amended Complaint on Defendants on July 21, 2021. See ECF Nos 16-49. After Defendants failed to answer or otherwise respond to the Second Amended Complaint, the Court ordered Plaintiffs to move for an entry of default judgment. See ECF Nos. 59, 61, 70. The Clerk entered certificates of default on November 30, 2021. ECF Nos. 76-79. Judge Daniels subsequently referred this matter to me for an inquest on damages. ECF No. 85. Plaintiffs filed their proposed findings of fact and conclusions of law. ECF No. 88. To date, Defendants have failed to respond.
DISCUSSION
I. Legal Standard
The Court of Appeals set forth the procedural rules applicable to the entry of a default judgment in City of New York v. Mickalis Pawn Shop, LLC:
“Federal Rule of Civil Procedure 55 is the basic procedure to be followed when there is a default in the course of litigation.” Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 246 (2d Cir. 2004). Rule 55 provides a “two-step process” for the entry of judgment against a party who fails to defend: first, the entry of a default, and second, the entry of a default judgment. New York v. Green, 420 F.3d 99, 104 (2d Cir. 2005). The first step, entry of a default, formalizes a judicial recognition that a defendant has, through its failure to defend the action, admitted liability to the plaintiff.... The second step, entry of a default judgment, converts the defendant's admission of liability into a final judgment that terminates the litigation and awards the plaintiff any relief to which the court decides it is entitled, to the extent permitted by Rule 54(c).645 F.3d 114, 128 (2d Cir. 2011).
Where default has been entered against a defendant, courts accept as true all the well-pleaded facts alleged in the complaint, except those concerning the amount of damages. See In re Indus. Diamonds Antitrust Litig., 119 F.Supp.2d 418, 420 (S.D.N.Y. 2000).
In an inquest for damages where the plaintiff has sufficiently pleaded a claim on which relief can be granted, the only remaining issue is to determine the amount of damages owed. See 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)). The plaintiff must provide adequate support for the requested relief. Id.; see also Malletier v. Carducci Leather Fashions, Inc., 648 F.Supp.2d. 501, 503 (S.D.N.Y. 2009) (“[A] plaintiff seeking to recover damages against a defaulting defendant must prove its claim th[r]ough the submission of evidence ....”). A court may determine the amount a plaintiff is entitled to recover without a hearing, so long as: (1) the court determines the proper rule for calculating damages, and (2) the evidence submitted by the plaintiff establishes “with reasonable certainty” the basis for the damages. Id.
II. Liability under FLSA and NYLL
To plead a FLSA claim, a plaintiff must show, “(1) the defendant is an enterprise participating in commerce or the production of goods for the purpose of commerce; (2) the plaintiff is an ‘employee' within the meaning of the FLSA; and (3) the employment relationship is not exempted from the FLSA.” Pelgrift v. 335 W. 41st Tavern Inc., No. 14-cv-8934 (AJN), 2017 WL 4712482, at *7 (S.D.N.Y. Sept. 28, 2017) (quoting Jiaren Wei v. Lingtou Zhengs Corp., No. 13-cv-5164 (FB)(CLP), 2015 WL 739943, at *5 (E.D.N.Y. Feb. 20, 2005)).
An enterprise engaged in commerce is an enterprise that “has employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce by any person” and has an “annual gross volume of sales made or business done . . . not less than $500,000.” 29 U.S.C. § 203(s)(1)(A)(i), (ii).
Plaintiffs' complaint states Defendants were engaged in interstate commerce, as a business that had gross sales over $500,000 per year and purchased and handled goods that moved outside of New York. Compl. ¶¶ 32-33. “Ordinarily, allegations detailing statutory definitions without providing additional facts may not be sufficient to infer a nexus to interstate commerce. In the context of default, however, the Court may accept these uncontested allegations as true and make reasonable inferences.” Singh v. Meadow Hill Mobile Inc., No. 20-cv-3853 (CS)(AEK), 2021 WL 3862665, at *4 (Aug. 29, 2021), rep. and rec. adopted, 2021 WL 3862665 (S.D.N.Y. Aug. 29, 2021); see also Fermin v. Las Delicias Peruanas Rest., Inc., 93 F.Supp.3d 19, 33 (E.D.N.Y. 2015) (“[I]t is reasonable to infer that [a restaurant] requires a wide variety of materials to operate .... It is also reasonable to infer that some of these materials moved or were produced in interstate commerce.”). Given the forgoing, Plaintiffs have adequately claimed that Defendants were participating in commerce.
Plaintiffs properly claim they were employees of Defendants for the relevant time period. An employee is “any individual employed by an employer.” 29 U.S.C. § 203(e)(1). The burden on Plaintiffs to demonstrate their status as employees is low. Fermin, 93 F.Supp.3d at 32 (“Insofar as Plaintiffs' complaint alleges that Defendants employed Plaintiffs within this statutory meaning, it follows that for purposes of this default, they qualify as employees under the FLSA.”) (cleaned up). Plaintiffs, who were employed as food preparers, dishwashers, and cooks are not exempt from the FLSA's overtime requirement. See Fermin, 93 F.Supp.3d at 32. Therefore, Plaintiffs have adequately claimed they were employees of Defendants for the relevant period.
The definitions of employer and employee are almost identical under NYLL, except an employer is not required to meet a certain minimum in sales to be liable for a violation. See Pelgrift, 2017 WL 4712482, at *7; see also N.Y. Lab. Law §§ 651(5)-(6). Defendants are liable as employers under the FLSA and NYLL because the tests are not meaningfully different. Pelgrift, 2017 WL 4712482, at *7. According to the FLSA and NYLL, each Defendant is jointly and severally liable for any damages awarded to Plaintiffs. See Pineda v. Masonry Constr., Inc., 831 F.Supp.2d 666, 685-86 (S.D.N.Y. 2011).
Plaintiffs allege Defendants violated the FLSA and NYLL by failing to adhere to rules on minimum wage and overtime wage compensation. Compl. ¶¶ 73, 77, 83, 89, 90. They further allege Defendants violated the NYLL's spread-of-hours, meal period, notice and record keeping, and wage statement provisions. Id. at ¶¶ 97, 101, 106, 112. Because Plaintiffs properly allege an employer-employee relationship with Defendants under both the FLSA and NYLL, I consider Defendants' alleged violations of both statutes.
A. Minimum Wage
The Defendants did not violate the FLSA and NYLL's minimum wage provisions. An employer may not pay an employee less than the statutory minimum wage for each hour the employee worked in any week. 29 U.S.C. § 206(a); N.Y. Lab. Law § 652(1). New York has an additional minimum wage order applicable to the hospitality industry. See 12 N.Y.C.R.R. § 146-1.1(a) (“Every employer in the hospitality industry must pay to each employee . . . at least the minimum wage rates provided in this Part.”). Employees bear the initial burden of proving they were not properly compensated for their work. de Los Santos v. Marte Constr., Inc., No. 18-cv-10748 (PAE)(KHP), 2020 WL 8549054, at *5 (Nov. 25, 2020), rep. and rec. adopted, 2020 WL 8549055 (S.D.N.Y. Dec. 17, 2020). “In the context of a default,” and where Plaintiffs “lack access to the employment records necessary to prove they were not properly compensated, Plaintiffs” may meet their burden of proof “by relying on recollection alone.” Id. (internal quotation marks and citation omitted).
1. Employer Size
Under New York law, the minimum wage rate is determined by the size of the employer. 12 N.Y.C.R.R. § 146-1.2(a)(1)(i)(a). Plaintiffs' complaint does not state Defendants' size. Where a plaintiff's complaint is silent as to the employer's size, district courts have taken varying approaches to determine the proper minimum wage rate to apply in a default judgment. One court determined plaintiffs would be awarded at the minimum wage rate of a large employer because of defendants' default. See Sanchez v. Jyp Foods Inc., No. 16-cv-4472 (JLC), 2018 WL 4502008, at *9 n.13 (S.D.N.Y. Sept. 20, 2018) (“[I]n light of defendants' default, the Court gives plaintiffs the benefit of the doubt and applies the rate [for large employers].”). Other courts in the district have declined to award plaintiffs the rate of large employers if they do not attest to the number of employees that worked for the defendant. See Anzurez v. La Unica Caridad Inc., No. 20-cv-3828 (JMF)(GWG), 2021 WL 2909521, at *4 (July 12, 2021) (finding plaintiff did not prove their employer employed 11 or more employees and therefore “must be compensated at the rate for small employers”), rep. and rec. adopted, 2021 WL 3173734 (S.D.N.Y. July 27, 2021).
The Court joins those who decline to award the rate of large employers absent evidentiary support. Plaintiffs do not to attest to any facts in the complaint regarding the number of employees at the Defendants' restaurant. Accordingly, the Court recommends Plaintiffs be compensated at the rate for small employers. See 12 N.Y.C.R.R. § 146-1.2(a)(1)(i)(b).
The minimum wage for small employers in New York during Plaintiffs' employment was $9.00 in 2016, $10.50 in 2017, $12.00 in 2018, $13.50 in 2019, and $15.00 in 2020. The federal minimum wage for these same periods was $7.25 per hour. 29 U.S.C. § 206(a)(1)(C). The Court will calculate damages using the New York wage rate because it is higher. See 29 U.S.C. § 218(a) (“No provision of this chapter . . . shall excuse noncompliance with . . . a minimum wage higher than the minimum wage established under this chapter ....”)
See 12 N.Y.C.R.R. § 146-1.2(a)(1)(i)(b); History of the Minimum Wage in New York State, https://dolny.gov/history-minimum-wage-new-york-state.
2. Regular Rate of Pay
Defendants did not violate the FLSA and NYLL minimum wage provisions. “If an employer fails to pay an employee an hourly rate of pay, the employee's regular hourly rate of pay shall be calculated by dividing the employee's total weekly earnings, not including exclusions ....” N.Y.C.R.R. § 146-3.5(b). “To determine the regular rate of pay for restaurant employees, the court must divide the employee's total weekly earnings, not including exclusions from the regular rate, by the lesser of 40 hours or the actual number of hours worked by that employee during the work week.” Anzurez, 2021 WL 2909521, at *3 (internal quotation marks and citation omitted).
Miculax worked for Defendants from approximately October 10, 2016, to March 20, 2020. Compl. ¶ 36. From approximately October 1, 2016, to October 31, 2017, Miculax was paid a flat compensation of $600 per week. ECF No. 82, Ex. 4 at ¶ 19. He typically worked 67 hours during this period. Id. at ¶ 14. Plaintiffs allege that Miculax was paid an hourly rate of $15, which is greater than the New York minimum wage in 2016 ($9.00). ECF No. 82-6. From approximately November 1, 2017, until May 31, 2018, Miculax was paid a flat weekly compensation of $750 and typically worked 67 hours per week. ECF No. 82, Ex. 4 at ¶¶ 14, 20. Plaintiffs allege that Miculax was paid an hourly rate of $18.75 during this period, which is greater than the minimum wage in New York during 2017 ($10.50) and 2018 ($12.00). ECF No. 82-6. From approximately June 1, 2018, until December 31, 2018, Miculax was paid a flat weekly compensation of $800 and typically worked 78 hours per week. ECF No. 82, Ex. 4 at ¶¶ 15, 21. Plaintiffs allege that Miculax was paid an hourly rate of $20.00 during this period, which is greater than the minimum wage in New York during 2018 ($12.00). ECF No. 82, Ex. 6. From approximately January 1, 2019, until March 20, 2020, Miculax was paid a flat compensation weekly compensation of $750 and typically worked 67 hours per week. ECF No. 82, Ex. 4 at ¶¶ 16, 22. Plaintiffs allege Miculax was paid an hourly rate of $18.75 during this period, which was greater than the minimum wage in New York during 2019 ($13.50) and 2020 ($15.00). As Miculax's presumptive regular rate of pay from October 10, 2016, through March 20, 2020, was greater than the New York minimum wage, he is not entitled to backpay for the first 40 hours worked during these periods.
Panzeis worked for Defendants from approximately October 1, 2018, until March 21, 2020. ECF No. 82-5 at ¶ 14. From approximately October 1, 2018, to January 31, 2019, Defendants paid Panzeis a weekly salary of $600 and he typically worked 67 hours per week. ECF No. 82, Ex. 5 at ¶¶ 14, 18. Plaintiffs allege Panzeis was paid an hourly rate of $15.00 during this period, which was greater than the minimum wage in New York in 2018 ($12.00) and 2019 ($13.50). ECF No. 82, Ex. 6. From approximately February 1, 2019, until July 31, 2019, Panzeis was paid a weekly salary of $660 and typically worked 67 hours per week. Id. at ¶¶ 68, 62. During this time, Plaintiffs allege that Panzeis was paid an hourly rate of $16.50, which was greater than the minimum wage in New York in 2019 ($13.50). ECF No. 82, Ex. 6. From approximately August 1, 2019, until September 30, 2019, Panzeis was paid a weekly salary of $680 and typically worked 88 hours a week. ECF No. 82, Ex. 6. During this time, Plaintiffs allege that Panzeis was paid an hourly rate of $17.00, which was greater than the minimum wage in New York in 2019 ($13.50). Id. From approximately October 1, 2019, until December 31, 2019, Panzeis was paid a weekly salary of $680 and typically worked 67 hours per week. Id. During this time, Plaintiffs allege he was paid an hourly rate of $17.00, which was greater than the minimum wage in New York in 2019 ($13.50). Id. Finally, from January 1, 2020, until March 21, 2020, Plaintiff was paid a weekly salary of $680 and typically worked 67 hours a week. Id. During this time, Plaintiffs allege that Panzeis was paid an hourly rate of $17.00, which was greater than the minimum wage in New York in 2020 ($15.00). As Panzeis' presumptive regular rate of pay from October 1, 2016, through March 21, 2020, was greater than the New York minimum wage, he is not entitled to backpay for the first 40 hours worked during this period.
B. Overtime Compensation
Defendants violated the FLSA and NYLL overtime compensation requirements by failing to pay Plaintiffs overtime wages for hours worked in excess of 40 hours a week. Under both the FLSA and NYLL, employees must be paid an overtime premium for hours worked in excess of 40 hours per week. 29 U.S.C. § 207(a)(1); 12 N.Y.C.R.R. § 146-1.4. Employees are entitled to be paid at a “rate not less than one and one-half times the regular rate at which [the employee] is employed.” 29 U.S.C. § 207(a)(1); see also 12 N.Y.C.R.R. § 146-1.4.
To state a claim for failure to pay overtime compensation, a plaintiff “must sufficiently allege 40 hours of work in a given workweek as well as some uncompensated time in excess of the 40 hours.” Lundy v. Cath. Health Sys. of Long Island Inc., 711 F.3d 106, 114 (2d Cir. 2013). An employer who violates 29 U.S.C. § 207 “shall be liable to the employee or employees affected in the amount of their unpaid . . . overtime compensation . . . and in an additional equal amount as liquidated damages.” 29 U.S.C. § 216(b); see also N.Y. Lab. Law § 663(1).
As established above, Plaintiffs sufficiently pleaded that they regularly worked in excess of 40 hours per week. See ECF No. 82 at ¶¶ 19-21, 25; Compl. at ¶¶ 41-43, 62-63. Plaintiffs were not compensated for the additional overtime hours they worked and were paid only fixed salaries. ECF No. 82 at ¶¶ 23 & 27; Compl. at ¶¶ 46-49, 66-68. Because Plaintiffs properly claim they typically worked in excess of 40 hours per week without receiving overtime compensation, the Defendants are liable for unpaid overtime wages as well as liquidated damages.
C. Spread-of-Hours Pay
Defendants are liable for unpaid spread-of-hours pay under N.Y.C.R.R. § 146-1.6. Spread-of-hours refers to the “length of the interval between the beginning and end of an employee's workday.” Id. On each workday that the spread-of-hours is greater than ten, an employee is entitled to one additional hour of pay at the minimum hourly rate. Id. The spread-of-hours regulation applies to employers that are “restaurants.” Id. A restaurant is “any eating or drinking place that prepares and offers food or beverage for human consumption ....” 12 N.Y.C.R.R. § 146-3.1(b). La Fonda Boricua, where Plaintiffs worked, is a Puerto Rican restaurant in Manhattan. Compl. at ¶¶ 1-3. Accordingly, the spread-of-hours regulation applies to Defendants.
Miculax worked shifts exceeding ten hours a day from approximately October 1, 2016, until March 20, 2020. Compl. at ¶¶ 41-43. He worked from approximately 11:00 a.m. to 10:00 p.m. (11 hours) or from approximately 11:00 a.m. until 10:30 p.m. (11.5 hours) seven to six days a week. Id. Thus, Miculax sufficiently pleaded entitlement to spread-of-pay at the minimum wage for each of those days. From approximately October 1, 2018, until March 21, 2020, Panzeis alternated between two schedules, working either from 11:00 a.m. to 10:00 p.m., 11:00 a.m. to 10:30 p.m., or from 9:00 a.m. to 10:00 p.m. Compl. at ¶¶ 62-64. Thus, Panzeis sufficiently pleaded entitlement to spread-of-hours pay for all his shifts during this period.
D. Wage Statement, Notice, and Record Keeping Requirements
The Wage Theft Prevention Act requires employers to provide annual wage notices to employees hired after April 9, 2011, and to provide each employee with accurate wage statements each time wages are paid. See N.Y. Lab. Law §§ 195(1)(a), 195(3). Section 195(1) requires an employer to provide employees a notice at the time of hiring, containing, among other things, “the rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or other; [and] allowances, if any, claimed as part of the minimum wage, including tip, meal, or lodging allowances ....” N.Y. Lab. Law § 195(1)(a). Section 195(3) requires that employers provide employees with certain wage statement information “with every payment of wages.” N.Y. Lab. Law § 195(3). An employer's failure to comply with either section of the law makes them liable for damages for each instance that the violations occurred or continued to occur. See N.Y. Lab. Law § 198(1-b) (stating that damages for wage notice violations under § 195(1) accumulate at a rate of $50 per day, but not to exceed $5,000); § 198(1-d) (stating that damages for wage statement violations under § 195(3) accumulate at a rate of $50 per day but may not exceed $5,000).
Plaintiffs sufficiently pleaded that the Defendants failed to comply with NYLL § 195(1)(a) and § 195(3). Compl. ¶¶ 53-55, 72-75. Plaintiffs nevertheless lack standing to maintain these claims. “Article III standing requires plaintiffs to show (1) an ‘injury in fact,' (2) a ‘causal connection' between that injury and the conduct at issue, and (3) a likelihood ‘that the injury will be redressed by a favorable decision.'” Maddox v. Bank of N.Y. Mellon Tr. Co., N.A., 19 F.4th 58, 62 (2d Cir. 2021) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992)).
To demonstrate an injury in fact, a plaintiff “must show the invasion of a [1] legally protected interest that is [2] concrete and [3] particularized and [4] actual or imminent, not conjectural or hypothetical.” Id. (quoting Strubel v. Comenity Bank, 842 F.3d 181, 188 (2d Cir. 2016)). While a so-called “informational injury” (i.e., failure to receive required information) can give rise to standing, see TransUnion LLC v. Ramirez, 141 S.Ct. 2190, 2214 (2021), the plaintiff must allege “downstream consequences” from failing to receive that information that show an interest in using the information “beyond bringing [this] lawsuit,” Harty v. W. Point Realty, Inc., 28 F.4th 435, 444 (2d Cir. 2022) (first quoting TransUnion, 141 S.Ct. at 2214, then Laufer v. Looper, 22 F.4th 871, 881 (10th Cir. 2022)). Plaintiffs fail to allege an injury in fact sufficient to confer standing and have not demonstrated how their lack of notice resulted in an injury greater than Defendants' minimum wage, overtime, and spread-of-hours wage violations. Nor have Plaintiffs identified an informational injury with consequences beyond this lawsuit. Accordingly, Plaintiffs cannot recover under NYLL wage notice and statement provisions.
E. Improper Wage Deductions
Finally, Plaintiffs seek damages for improper wage deductions. ECF No. 82 at ¶ 43. Under N.Y.C.R.R. 12 § 146-2.7, “[e]mployers may not make any deductions from wages. . . charge employees separately from wages for items prohibited as deduction . . . or spend money to carry out duties assigned by his or her employer.” Because Plaintiffs failed to allege facts to support this claim in their complaint, Plaintiffs cannot recover damages for improper wage deductions.
III. Damages
Because I find that Plaintiffs have demonstrated that the Defendants are liable for the FLSA and NYLL violations, it is appropriate to award them damages as supported by the evidence submitted for this inquest. See ECF No. 82, Ex. 6; Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992) (damages following default must be established by the plaintiff). Determining the appropriate amount of damages “involves two tasks: determining the proper rule for calculating damages on such a claim, and assessing plaintiff's evidence supporting the damages to be determined under this rule.” Santana v. Latino Express Rests., Inc., 198 F.Supp.3d 285, 291 (S.D.N.Y. 2016). A court need not hold an evidentiary hearing to determine damages but must take the necessary steps to establish damages with reasonable certainty. Id.
A. Backpay Under FLSA and NYLL
The FLSA and NYLL require an employer to pay at least the statutory set minimum wage for each hour an employee works in any workweek. 29 U.S.C. § 206(a); 12 N.Y.C.R.R. § 146-1.1(a). Plaintiffs sufficiently pleaded that Defendants violated the overtime provisions of both the FLSA and NYLL. But they are entitled to recovery under only one statute. See Hernandez v. Jrpac Inc., No. 14-cv-4176 (PAE), 2016 WL 3248493, at *31. (S.D.N.Y. June 9, 2016) (“Plaintiffs may not receive a double recovery of back wages under both the FLSA and NYLL.”) (cleaned up).
Under New York and federal law, a court has discretion to award damages under whichever statute offers the greatest amount of relief. Gamero v. Koodo Sushi Corp., 272 F.Supp.3d 481, 498 (S.D.N.Y. 2017), aff'd, 752 Fed.Appx. 33 (2d Cir. 2018); see also 29 U.S.C. § 218(a). Because New York's minimum wage exceeds the federal rate, Plaintiffs' damage calculations will be governed by NYLL provisions. See Hernandez, 2016 WL 3248493, at *31 (awarding plaintiffs damages under NYLL “because of the higher minimum” and acknowledging that those damages “will subsume their award under the FLSA”).
Both FLSA and NYLL require employers to pay their employees a premium (150 percent of the employee's regular rate of pay) for hours worked above 40 hours per week. See 29 U.S.C. § 207(a)(1); 12 N.Y.C.R.R. § 142-2.2.
1. Plaintiff Miculax's Unpaid Overtime Wages
Miculax alleges he was paid a flat weekly rate of $600 from approximately October 1, 2016, until October 31, 2017. This results in a presumptive hourly rate of $15.00, calculated by dividing this weekly rate by 40 (hours). Miculax should have been paid $22.50 per hour for the 27 overtime hours he worked each week. Miculax worked 13 weeks in 2016 and 43 weeks at this regular rate of pay in 2017, entitling him to an additional $7,897.50 (27 hours x 13 weeks x $22.50 hourly wage) and $26,122.50 (27 hours x 43 weeks x $22.50 hourly wage) in overtime pay.
Miculax alleges he was paid a flat weekly rate of $750 from November 1, 2017, through May 31, 2018. This results in a presumptive hourly rate of $18.75, calculated by dividing this weekly rate by 40 (hours). Miculax should have been paid $28.13 per hour for the 27 overtime hours he worked each week. He worked at this regular rate of pay for 9 weeks in 2017 and 21 weeks in 2018, entitling him to an additional $6,835.59 (27 hours x 9 weeks x $28.13 hourly wage) and $15,949.71 (27 hours x 21 weeks x $28.13 hourly wage).
Miculax alleges that he was paid a flat weekly rate of $800 from June 1, 2018, through December 31, 2018. This results in a presumptive hourly rate of $20, calculated by dividing this weekly rate by 40 (hours). Miculax should have been paid $30 per hour for the 38 overtime hours he worked each week. He worked at this regular rate of pay for 30 weeks in 2018, entitling him to an additional $34,200.00 (38 hours x 30 weeks x $30.00) in overtime pay.
Miculax alleges he was paid a flat weekly rate of $750 from approximately January 1, 2019, until March 20, 2020. This results in a presumptive hourly rate of $18.75, calculated by dividing this weekly rate by 40 (hours). Miculax should have been paid $28.13 per hour for the 27 overtime hours he worked each week. He worked at this regular rate of pay for 52 weeks in 2019 and 11 weeks in 2020, entitling him to an additional $39,494.52 (27 hours x 52 weeks x $28.13 hourly wage) and $8,354.61 (27 hours x 11 weeks x $28.13 hourly wage) in overtime pay.
In total, Miculax is entitled to $138,854.40 in overtime wages.
2. Plaintiff Panzeis's Unpaid Overtime Wages
Panzeis alleges he was paid a flat weekly rate of $600 from approximately October 1, 2018, until January 31, 2019. This results in a presumptive hourly rate of $15.00, calculated by dividing this weekly rate by 40 (hours). Panzeis should have been paid $22.50 per hour for the 27 overtime hours he worked each week. He worked at this regular rate of pay for 13 weeks in 2018 and 4 weeks in 2019, entitling him to an additional $7,897.50 (27 hours x 13 weeks x $22.50 hourly wage) and $2,430.00 (27 hours x 4 weeks x $22.50 hourly wage).
Panzeis alleges he was paid a flat weekly rate of $660 from approximately February 1, 2019, until July 31, 2019. This results in a presumptive hourly rate of $16.50, calculated by dividing the weekly rate by 40 (hours). Panzeis should have been paid $24.75 per hour for the 27 overtime hours he worked each week. He worked at this regular rate of pay for 26 weeks in 2019, entitling him to an additional $17,374.50 (27 hours x 26 weeks x $24.75 hourly wage).
Panzeis alleges he was paid a flat weekly rate of $680 from approximately from August 1, 2019, through March 21, 2020. This results in a presumptive hourly rate of $17, calculated by dividing the weekly rate by 40 (hours). Panzeis should have been paid $25.50 per hour for the 48 overtime hours he worked each week from August 1, 2019, through September 30, 2019, and the 27 overtime hours he worked each week from October 1, 2019, through March 21, 2020. Thus, he is entitled to an additional $11,016.00 (48 hours x 9 weeks x $25.50 hourly wage) and $14,580.00 (27 hours x 24 weeks x $25.50 hourly wage).
In total, Panzeis is entitled to $53,298 in overtime wages.
B. Spread-of-Hours Pay
Under the NYLL, “on each day on which [an employee's] spread of hours exceeds 10, [the] employee shall receive one additional hour of pay at the basic minimum hourly rate.” 12 N.Y.C.R.R. § 146-1.6(a). The additional hour of pay is not included in the regular rate of pay when calculating overtime wages because it “is not a payment for time worked or work performed ....” 12 N.Y.C.R.R. § 146-1.6(c).
Miculax established he worked shifts exceeding 10 hours for six days a week from October 1, 2016, until May 31, 2018, and later from January 1, 2019, until March 20, 2020. He also established he worked shifts exceeding 10 hours for seven days a week from June 1, 2018, until December 31, 2018. Accordingly, I recommend the Court award Miculax spread-of-hours pay. Miculax should be awarded $702.00 (6 hours x 13 weeks x $9 hourly wage) in spread-of-hours pay for 2016. Miculax should be awarded $3,276.00 (6 hours x 52 weeks x $10.50 hourly wage) in spread-of-hours pay for 2017. Miculax should be awarded $4,032.00 (6 hours x 21 weeks x $12.00 hourly wage, plus 7 hours x 30 weeks x $12.00 hourly wage) in spread-of-hours pay for 2018. Miculax should be awarded $4,212.00 (6 hours x 52 weeks x $13.50 hourly wage) for spread-of-hours pay for 2019. Finally, Miculax should be awarded $990.00 (6 hours x 11 weeks x $15.00 hourly wage) for spread-of-hours pay for 2020. In total, I recommend Miculax be awarded $13,212.00 in spread-of-hours pay.
Panzeis established he worked shifts exceeding 10 hours for six days a week from October 1, 2018, until July 31, 2019, and again from October 1, 2019, through March 21, 2020. He also established that he worked shifts exceeding 10 hours for seven days a week from August 1, 2019, through September 30, 2019. Accordingly, I recommend the Court award Panzeis spread-of-hours pay. Panzeis should be awarded $936.00 (6 hours x 13 weeks x $12.00 hourly wage) for spread-of-hours pay for 2018. Panzeis should be awarded $3,658.50 (6 hours x 30 weeks x $13.50 hourly wage, plus 7 hours x 13 weeks x 13.50) for spread-of-hours pay for 2019. Finally, Panzeis should be awarded $990 (6 hours x 11 weeks x $15.00 hourly wage) for spread-of-hours pay for 2020. In total, I recommend Pazeis be awarded $6,813.00 in spread-of-hours pay.
C. Liquidated Damages
Under the FLSA and NYLL, a plaintiff who is owed minimum or overtime wages may recover an “additional equal amount as liquidated damages.” 29 U.S.C. § 216(b); N.Y. Lab. Law § 198(1-a). Liquidated damages may also be assessed for spread of hours pay. See Reyes v. Cafe Cousina Rest. Inc., No. 18-cv-1873 (PAE)(DF), 2019 WL 5722475, at *6 (S.D.N.Y. Aug. 27, 2019) (awarding liquidated damages for unpaid spread-of-hours pay).
The court may reduce or deny liquidated damages if the employer can show that “the act or omission giving rise to [the FLSA] action was in good faith and that he had reasonable grounds for believing it was not a violation of [FLSA].” 29 U.S.C. § 260. Similarly, under the NYLL, an employee is entitled to liquidated damages equal to the amount of the overtime pay “unless the employer proves a good faith basis for believing that its underpayment of wages was in compliance with the law.” N.Y. Lab. Law § 198(1-a).
To establish “good faith” under the FLSA, an employer must show that it took “active steps to ascertain the dictates of the FLSA and . . . comply with them.” Barfield v. New York City Health & Hosp. Corp., 537 F.3d 132, 150 (2d Cir. 2008) (quoting Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132, 142 (2d Cir. 1999)). “NYLL's willfulness standard does not appreciably differ from the FLSA's willfulness standard.” Kuebel v. Black & Decker Inc., 643 F.3d 352, 366 (2d. Cir. 2011) (internal quotation marks and citation omitted). Defendants defaulted, and therefore have made no showing of good faith to merit reducing or denying liquidated damages. See Xochimitl v. Pita Grill of Hell's Kitchen, Inc., No. 14-cv-10234 (JGK)(JLC), 2016 WL 4704917, at *15 (Sept. 8, 2016), rep. and rec. adopted, 2016 WL 6879258 (S.D.N.Y. Nov. 21, 2016) (“Courts deem defendants' actions willful where they have defaulted . . . consequently, such defaulting defendants will have obviously made no showing of good faith.”) (cleaned up).
Plaintiffs may not, however, recover “duplicative liquidated damages for the same course of conduct” under both the FLSA and NYLL. Rana v. Islam, 887 F.3d 118, 123 (2d Cir. 2018). Accordingly, the Court recommends awarding Plaintiffs liquidated damages under NYLL only. Miculax is entitled to an additional $152,066.43, representing 100% of his unpaid wages and spread-of-hours pay. Panzeis is entitled to an additional $60,111.00, representing 100% of his unpaid wages and spread-of-hours pay.
D. Pre-Judgment and Post-Judgment Interest
New York law provides for an award of pre-judgment interest in addition to liquidated damages. N.Y. Lab. Law § 198(1-a); Underwood v. TAFSC Hous. Dev. Fund Corp., No. 18-cv-6664 (JPO), 2019 WL 5485211, at *5 (S.D.N.Y. Oct. 25, 2019) (citing Reilly v. Natwest Mkts. Grp. Inc., 181 F.3d 253, 265 (2d Cir. 1999)). Pre-judgment interest is available only on actual damages, not liquidated damages. Id.
Under New York law pre-judgment interest is calculated at nine percent per year. N.Y. Lab. Law § 198(1-a); N.Y. CPLR § 5004. “Where damages are incurred at various times interest shall be computed upon all of the damages from a single reasonable intermediate date.” Underwood, 2019 WL 5485211, at *5 (cleaned up). The “reasonable intermediate date” is often the midpoint of a plaintiff's employment. Id.
For the purposes of calculating pre-judgment interest for Plaintiff Miculax's damages, the Court selects June 26, 2018, (the midpoint between Miculax's start date of October 1, 2016, and his end date of March 20, 2020). The Court selects June 26, 2019, (the midpoint between Panzeis's start date of October 1, 2018, and end date of March 21, 2020) as a reasonable intermediate date from which to calculate pre-judgment interest for Panzeis's damages. Thus, I recommend Plaintiff Miculax and Plaintiff Panzeis be granted pre-judgment interest on their total actual damages from June 26, 2018, and June 26, 2019, respectively, at the rate of nine percent per year, until the date of entry of judgment.
Plaintiffs have not made any request for or any argument as to post-judgment interest on this motion. Under 28 U.S.C. § 1961(a), “[i]nterest shall be allowed on any money judgment in a civil case recovered in a district court.” Under this statute, an award of post-judgment interest is mandatory in any civil case where monetary damages have been awarded. Fermin, 93 F.Supp.3d 19, 53; see, eg. Begum v. Ariba Disc., Inc., No. 12-cv-6620 (DLC), 2015 WL 223780, at *8 (S.D.N.Y. Jan. 16, 2015) (awarding post-judgment interest in a FLSA and NYLL wage-and-hour case). Despite Plaintiffs' failure to request post-judgment interest, I recommend they be granted post-judgment interest, to be calculated at the federal rate from the date the Clerk of Court enters judgment until the date Defendants pay. See Fermin, 93 F.Supp.3d 19, 53 (recommending post-judgment interest despite plaintiffs' failure to request this relief).
E. Additional Interest
Plaintiffs also request that “the judgment provide that if any amounts remain unpaid upon the expiration of ninety days following issuance of judgment, or ninety days after expiration of the time of appeal and no appeal is then pending, whichever is later, the total amount of judgment [] automatically increase by fifteen percent, as required by NYLL § 198(4).” ECF No. 82 at ¶ 62. Plaintiffs' “request is in accordance with the provisions on the NYLL, and is therefore granted.” Victor v. Sam's Deli Grocery Corp., No. 19-cv-2965 (SLC), 2022 WL 3656312, at *16 (S.D.N.Y. Aug. 25, 2022) (citing Dominguez v. Metro. Wireless Anandpur Inc., No. 21-cv-2240 (PAE) (KHP), 2022 WL 1164709, at *9 (Jan. 27, 2022), rep. and rec. adopted, 2022 WL 421126 (S.D.N.Y. Feb. 11, 2022)).
IV. Attorney's Fees and Costs
A prevailing plaintiff, under both federal and state statutes, is entitled to reasonable attorney's fees and costs. 29 U.S.C. § 216(b); N.Y. Lab. Law § 198(4). Courts determine the “presumptively reasonable fee” for an attorney's services by looking to “what a reasonable, paying client would be willing to pay,” “who wishes to pay the least amount necessary to litigate the case effectively.” Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cnty. of Albany, 522 F.3d 182, 184 (2d Cir. 2008). The “presumptively reasonable fee” is the product of a reasonable hourly rate and the reasonable number of hours required by the case. See Millea v. Metro-North R.R. Co., 658 F.3d 154, 166 (2d Cir. 2011).
Plaintiffs request a total of $14,532.50 in fees for 52.80 hours of attorney and paralegal work. ECF No. 82, Ex. 7. Attorney Michael Faillace was the managing member of Michael Faillace & Associates, P.C., which is now CSM Legal. ECF No. 82 at ¶ 55. He has practiced law since 1983. Id. He was in-house employment counsel for IBM for 17 years, has taught employment law as an adjunct professor at Fordham University School of Law and at Seton Hall University School of Law and is the author of a disability law desk-book. Id. He requests an hourly rate of $450 for 5.7 hours of work. Id.; see also ECF No. 82, Ex. 7.
Associate Clifford Tucker graduated from Brooklyn Law School in 2013. He was an associate at Michael Faillace & Associates and worked as an associate at two other law firms. Id. He requests an hourly rate of $350 for 13.5 hours of work. Associate Bryan D. Robinson graduated from Maurice A. Deane School of Law at Hofstra University in 2018. He worked as an associate at two other law firms before working at CSM Legal. He requests an hourly rate of $300 for 15.3 hours of work. ECF No. 82 at ¶ 55; see also ECF No. 82, Ex. 7.
Plaintiffs also seek fees for the 18 hours worked by one or more unnamed paralegals at a rate of $125 per hour. ECF No. 82 at ¶ 55; see also ECF No. 82, Ex. 7.
A. Reasonable Rates
In determining reasonable fees for a particular case, courts rely on reasonable hourly rates prevailing in the same district for similar services provided by attorneys with comparable skill and experience. See Arbor Hill, 522 F.3d at 184; Sub-Zero, Inc. v. Sub Zero NY Refrigeration & Appliances Servs., Inc., No. 13-cv-02548 (KMW)(JLC), 2014 WL 1303434, at *8 (S.D.N.Y. Apr. 1, 2014) (“It is the fee movant's burden to establish the prevailing market rate.”).
“Courts in this District have recently determined that a reasonable rate for senior attorneys handling wage-and-hour cases, in this market, typically ranges from $300 to $400 per hour.” Wan v. YWL USA Inc., No. 18-cv-10334 (CS), 2021 WL 1905036, at *5 (S.D.N.Y. May 12, 2021) (cleaned up). Accordingly, I recommend the Court reduce Mr. Faillace's rate to $400 per hour. See Maldonado v. Papadopoulos, No. 20-cv-6850 (LGS)(KHP), 2021 WL 5363016, at *11 (July 17, 2021), adopted as modified, 2021 WL 4596535 (S.D.N.Y. Oct. 6, 2021) (awarding Faillace $400 per hour); Salas v. Leo's Bagels Hanover Square LLC, No. 21-cv-1728 (OTW), 2022 WL 2384153, at *2 (S.D.N.Y. July 1, 2022) (awarding Faillace $400 per hour); Diaz-Caballero, 2020 WL 8880944, at *2 (rejecting Faillace's request for $450 per hour and noting this rate has “been rejected repeatedly by courts in this district within the last year”).
An appropriate associate rate depends upon their level of experience. Thor 725 8th Ave. LLC v. Goonetilleke, No. 14-cv-04968 (PAE), 2015 WL 8784211, at *11 (S.D.N.Y. Dec. 15, 2015); see Rosendo v. Everbrighten Inc., No. 13-cv-7256 (JGK)(FM), 2015 WL 1600057, at *9 (Apr. 7, 2015), rep. and rec. adopted, 2015 WL 4557147 (S.D.N.Y. July 28, 2015) (finding that the reasonable hourly rate for a senior attorney with ten years of experience is $300, and for an associate with three years of experience is $225); Hernandez, 2017 WL 6311868, at *2 (finding that a reasonable hourly rate for associates with three to four years of experience is $250). The Court joins other courts in recommending that Mr. Tucker be awarded an hourly rate of $300. See Campos Marin v. J&B 693 Corp., No. 19-cv-00569 (JGK) (KHP), 2022 WL 377974, at *12 (Jan. 21, 2022), rep. and rec. adopted, 2022 WL 374522 (S.D.N.Y. Feb. 7, 2022) (finding Mr. Tucker's hourly rate of $300 was “in the range awarded to similarly experienced employment law attorneys in this district”). As Mr. Robinson has less than five years of experience as a lawyer, I recommend his rate be reduced to $250 an hour.
“Hourly rates for paralegals of $100 to $150 per hour are typical for awards in this District.” Inga v. Nesama Food Corp., No. 20-cv-0909 (ALC) (SLC), 2021 WL 3624666, at *14 (July 30, 2021), rep. and rec. adopted, 2021 WL 3617191 (S.D.N.Y. Aug. 16, 2021) (citing cases). Because counsel “provided absolutely no information regarding the level of experience of the paralegal or paralegals who worked on the matter,” I join other courts in reducing the requested rate of unnamed CSM Legal paralegals to $100. Cazares v. 2898 Bagel & Bakery Corp., No. 18-cv-5953 (AJN) (DF), 2022 WL 1410677, at *28 (Apr. 7, 2022), rep. and rec. adopted, No. 18-cv-5953 (AJN) (VF), 2022 WL 1406203 (S.D.N.Y. May 4, 2022).
B. Reasonable Hours
When evaluating whether claimed hours are reasonable, “the district court should exclude excessive, redundant[,] or otherwise unnecessary hours, as well as hours dedicated to severable unsuccessful claims.” Quarantino v. Tiffany & Co., 166 F.3d 422, 425 (2d Cir. 1997). An attorney who requests “court-ordered compensation . . . must document the application with contemporaneous time records . . . specify[ing], for each attorney, the date, the hours expended, and the nature of the work done.” N.Y. State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1148 (2d Cir. 1983).
In support of their application, Plaintiffs' attorneys have submitted a billing invoice. ECF No. 82, Ex. 7. This time record reflects that Mr. Faillace (“MF”) performed 5.7 hours of work, Mr. Tucker (“KH”) performed 13.5 hours of work and Mr. Robinson (“BR”) performed 15.3 hours of work, for a total of 34.5 hours. Id. The time record also reflects that “PL” performed 18 hours of work and “CE” performed .3 hours of work. Id. Plaintiffs have not explained who “PL” and “CE” are.
Because “PL's” hourly rate is $125, the same rate requested for paralegals, the Court assumes “PL” refers to paralegals. Given that the Court has no way to assess the reasonableness of the time expended by “CE” in this matter, the Court will exclude their entries from the total fee award. However, this Court concludes that the number of hours reflected in the submitted timesheets are reasonable with respect to work performed by Mr. Faillace, Mr. Tucker, Mr. Robinson, and CSM Legal Paralegals. Accordingly, this Court finds that Plaintiff may recover attorney's fees in the total amount of $11,995.00, representing $2,280.00 for Mr. Faillace, $4,050.00 for Mr. Tucker, $3,825.00 for Mr. Robinson, and $1,800.00 for CSM Legal paralegals.
C. Costs and Remedies
Plaintiffs also seek costs in the amount of $778.60, which consists of a $400 filing fee and $378.60 in process server fees. The Court finds these costs to be reasonable and comparable to other amounts awarded upon default judgment. See Romita v. Anchor Tank Lines Corp., No. 09-cv-09997 (DLC), 2011 WL 1641981, at *2 (S.D.N.Y. Apr. 29, 2011) (awarding $504 in court costs for filing and process server fees); Int'l Ass'n of Heat & Frost Insulators & Asbestos Workers Loc. Union No. 12A v. Trade Winds Envt l., No. 09-cv-01771 (RJH)(JLC), 2010 WL 8020302, at *6 (Dec. 23, 2010) (awarding $701.75 in court costs for filing and process server fees), rec. and rep. adopted, 2011 WL 5843757 (S.D.N.Y. Nov. 18, 2011).
CONCLUSION
I recommend that the Court find Defendants liable for $437,088.46 plus applicable interest, as follows:
(1) $152,066.43 in back pay and spread-of-hours damages to Plaintiff Miculax, plus nine percent prejudgment simple interest calculated from June 26, 2018, to the date of judgment;
(2) $60,111.00 in back pay and spread-of-hours damages to Plaintiff Panzeis, plus nine percent prejudgment simple interest calculated from June 26, 2019, to the date of judgment;
(3) $152,066.43 in liquidated damages to Plaintiff Miculax;
(4) $60,111.00 in liquidated damages to Plaintiff Panzeis;
(5) $10,155 in attorneys' fees; and
(6) $778.60 in costs.
NOTICE OF PROCEDURE FOR FILING 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. A party may respond to another party's objections within fourteen days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Such objections shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable George B. Daniels at the United States Courthouse, 500 Pearl Street, New York, New York 10007, and to any opposing parties. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Daniels. The failure to file these timely objections will result in a waiver of those objections for purposes of appeal. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).