Opinion
22-CV-01423 (JLR)(SN)
08-11-2023
AMBERLYN MONTALVO, Plaintiff, v. PAUL BAR & RESTAURANT CORP., et al., Defendants.
TO THE HONORABLE JENNIFER L. ROCHON:
REPORT AND RECOMMENDATION
SARAH NETBURN, United States Magistrate Judge:
As relevant here, Amberlyn Montalvo (“Plaintiff”) sued Defendants Paul Bar & Restaurant Corporation d/b/a The Paul Hotel Rooftop Bar (the “Rooftop Bar”), Jose Maldonado, and Mohan Aluwalia (the “Defendants”) after they allegedly failed to pay Plaintiff minimum and overtime wages, spread-of-hours pay, and unpaid tips as required by the Fair Labor Standards Act (“FLSA”) and New York Labor Law (“NYLL”). Plaintiff also alleges violations of various other NYLL provisions. Defendants have failed to appear, and Plaintiff moved for default judgment and attorney's fees. I recommend finding that Defendants are liable for violating overtime and minimum wage provisions of the FLSA and NYLL and failing to provide tips. I further recommend Plaintiff be awarded a total of $36,835.84, plus all applicable interest.
BACKGROUND
Plaintiff Amberlyn Montalvo filed a complaint on February 21, 2022, seeking monetary damages arising out of the FLSA and NYLL violations by The Rooftop Bar, The Paul Hotel Inc., Jose Maldonado, Joginder Sharma, and Shashi Sharma. ECF No. 1 (“Compl.”). Plaintiff filed affidavits of service on March 16, 2022, April 18, 2022, May 3, 2022, May 2, 2022. ECF Nos. 22-27. Thereafter, Plaintiff filed an amended complaint, adding Defendant Mohan Aluwalia, who was served on August 1, 2022. ECF No. 47 (“Am. Compl.”); ECF No. 52. Plaintiff voluntarily dismissed The Paul Hotel Inc., Shasid Sharma, and Joginder Sharama on July 1, 2022. ECF No. 50.
Defendants employed Plaintiff as a bartender from approximately April 18, 2021, to June 8, 2021. Am. Compl., ¶ 21. Plaintiff was paid $40 per shift and generally worked a 10-hour shift. Am. Compl., ¶¶ 26-27. Defendants willfully and knowingly denied Plaintiff minimum wage, overtime compensation, appropriate tips, spread-of-hours pay, and failed to provide Plaintiff with required notice and wage statements. Am. Compl., ¶¶ 31-64.
Plaintiff seeks damages for unpaid minimum wage, overtime compensation, and tips as well as for Defendants' failure to provide an accurate paystub, spread-of-hours pay and other violations under NYLL as applicable. Am. Compl., ¶ 64. Plaintiff claims she is entitled to liquidated damages, pre-judgment and post-judgment interest, reimbursement for expenses incurred in this action, and attorney's fees and costs. Id.
Defendants failed to answer or otherwise respond to the amended complaint, and the Court ordered Plaintiff to file a motion for default judgment. ECF No. 58. The Clerk entered certificates of default against the Defendants on May 31, 2022, June 7, 2022, and September 13, 2022. ECF Nos. 33, 36, & 56. Plaintiff moved for default judgment on November 10, 2022, and filed a motion for attorney's fees and costs on January 20, 2023. ECF No. 62 & 71. 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 ofjudgment 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).
Plaintiff's complaint states that the Rooftop Bar was 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. Am. Compl., ¶¶ 7-8. “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, Plaintiff has adequately claimed that Defendant Rooftop Bar was participating in interstate commerce.
Plaintiff also alleges that Defendants Mohan Aluwalia and Jose Maldonado qualified as her “employers” at Rooftop Bar and therefore can be held individually liable under FLSA and NYLL. The definition of “employer” includes “any person acting directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. § 203(d). This definition is interpreted expansively so that the statute may “have ‘the widest possible impact in the national economy.'” Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132, 139 (2d Cir. 1999) (quoting Carter v. Dutchess Community College, 735 F.2d 8, 12 (2d Cir. 1984)). To be an “employer,” an individual defendant must “must possess control over a company's actual ‘operations' in a manner that relates to a plaintiff's employment.” Irizarry v. Catsimatidis, 722 F.3d 99, 109 (2d Cir. 2013).
Courts consider four factors to determine whether an individual is an “employer”: “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. (citing Barfield v. New York City Health & Hosps. Corp., 537 F.3d 132, 142 (2d Cir. 2008)) (internal quotation marks omitted). Employment is a “a flexible concept to be determined on a case-by-case basis by review of the totality of the circumstances.” Id. at 104. Plaintiff alleged that Aluwalia and Maldonado owned, operated, and controlled the Rooftop Bar, and determined Plaintiff's wages, compensation, work schedule, and had the authority to hire and fire employees, including Plaintiff. Am. Compl., ¶¶ 10-19. The Court finds that three of the economic reality factors are satisfied, and thus Aluwalia and Maldonado were the Plaintiff's employers.
Plaintiff claims she was an employee of Defendants during the relevant time. 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). Plaintiff, who was employed as a bartender, is not exempt from the FLSA's overtime requirement. See Fermin, 93 F.Supp.3d at 32. Therefore, Plaintiff has adequately claimed she was an employee 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 Plaintiff. See Pineda v. Masonry Constr., Inc., 831 F.Supp.2d 666, 685-86 (S.D.N.Y. 2011).
Plaintiff alleges Defendants violated the FLSA and NYLL by failing to adhere to rules on minimum wage, overtime wage compensation, tips, and record keeping. Am. Compl., ¶¶ 45-48, 49, 55-56, 58-60, 71-72. She further alleges Defendants violated the NYLL's spread-of-hours, notice and record keeping, wage statement, and frequency provisions. Id. at ¶¶ 57, 61-73. Because Plaintiff properly alleges 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 violated 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).
Both NYLL and FLSA allow employers to pay tipped food service workers less than the statutory minimum wage by crediting a portion of their tips against the minimum wage. 29 U.S.C. § 203(m)(2); NYLL § 652(4). To be eligible to take a tip credit under FLSA, “an employer must first notify the employees of the requirements of the law regarding minimum wages and of the employer's intention to take the tip credit.” Yu G. Ke v. Saigon Grill, Inc., 595 F.Supp.2d 240, 254 (S.D.N.Y. 2008). Defendants failed to give Plaintiff notice of FLSA's tip credit provision. ECF No. 62, Ex. 1 at 18. Under NYLL, an employer must provide “substantial evidence” that the employee received tips and that “the [tip credit] claimed by the employer is recorded on a weekly basis as a separate item in the wage record.” 12 N.Y.C.R.R § 142-2.5(b). Because Defendants did not satisfy these requirements, Plaintiff is entitled to recover damages based on the full minimum wage.
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). Plaintiff's 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. Plaintiff does not attest to any facts in the complaint regarding the number of employees at the Defendants' restaurant. However, her brief assumes a rate consistent with a small employer status. Br. at 14. Accordingly, the Court recommends that Plaintiff be compensated at the rate for small employers. See 12 N.Y.C.R.R. § 146-1.2(a)(1)(i)(b).
The New York minimum hourly wage for small employers during Plaintiff's employment was $15.00 in 2021. The federal minimum wage for this same period 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 violated 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).
Plaintiff worked for Defendants from approximately April 18, 2021, to June 8, 2021. Am. Compl., ¶ 21; ECF No. 62, Ex. 2 (“Montalvo Decl.”) at ¶ 4. Plaintiff alleges in her amended complaint that she typically worked 10 hours a day, that her stated rate of pay was $40 per day, and that she was not paid consistently on a weekly basis. Am. Compl., ¶¶ 26, 27, 52. In her motion for default judgment, Plaintiff asserts that she was not always paid $40 per day; rather, she states that “[s]ometimes I was paid $40 a day, sometimes I was paid less, and sometimes I was not paid at all.” Montalvo Decl., ¶ 14. Similarly, in her brief, Plaintiff requests that Defendants receive no credit for the $40 per day because it was not consistently paid. Br. at 14.
“A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed.R.Civ.P. 54(c). See also Pac. Westeel, Inc. v. D & R Installation, No. 01-cv-0293 (RLC)(AJP), 2003 WL 22359512, at *2 (S.D.N.Y. Oct. 17, 2003) (“The first sentence of Rule 54(c) states that a judgment by default is limited to the relief demanded in the complaint. The theory of this provision is that the defending party should be able to decide on the basis of the relief requested in the original pleading whether to expend the time, effort, and money necessary to defend the action.” (quoting 10 Wright, Miller & Kane, Federal Practice & Procedure; Civil 3d § 2663 (1998))). Declining to credit the $40 per day she alleged she was paid in her complaint would permit Plaintiff to recover a larger award than the complaint requested. Rule 54(c) prohibits this. See Silge v. Merz, 510 F.3d 157, 159-60 (2d Cir. 2007).
Additionally, Plaintiff must prove her damages with “reasonable certainty.” Credit Lyonaise Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999). Plaintiff's declaration does not establish with “reasonable certainty” how often she was paid. Instead, she merely asserts that “sometimes” she was paid $40 a day, “sometimes” she was paid less, and “sometimes” she was not paid at all. Montalvo Decl., ¶ 14. In a supplemental filing, Plaintiff's counsel argues that Defendants' nondelegable duty to maintain records permits a court to rely on a plaintiff's recollection alone. See Kuebel v. Black & Decker Inc., 643 F.3d 352, 263 (2d Cir. 2011). ECF No. 70. While this legal proposition is true, the Court cannot simply pick an arbitrary payment rate of its own choosing. Plaintiff's failure to estimate her payment rate means she has failed to meet her burden.
Thus, in light of the obligation under Rule 54(c) to limit damages to what is alleged in the complaint, and the burden on Plaintiff to establish her damages to a reasonable degree of certainty, the Court will assume Plaintiff was paid $40 per 10-hour shift. Such payment constitutes a violation of the New York minimum wage in 2021, which required restaurant workers to be paid at an hourly rate of $15 for the first 40 hours worked.
B. Overtime Compensation
Defendants violated the FLSA and NYLL overtime compensation requirements by failing to pay Plaintiff 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).
During her first three weeks of employment, Plaintiff worked approximately three shifts per week, totaling 30 hours per week. Am. Compl., ¶ 26. During the subsequent four weeks, Plaintiff worked five shifts per week, totaling 50 hours per week. Id. Plaintiff sufficiently pleaded she regularly worked in excess of 40 hours per week during the last four weeks of her employment. Plaintiff was not compensated for the additional overtime hours she worked and was paid a fixed salary. Accordingly, Defendants are liable for unpaid overtime wages as well as liquidated damages.
In her declaration in support of her default motion, Plaintiff states she worked five shifts per week from April 18-May 10, 2021, and three shifts per week from May 11-June 8, 2021. Montalvo Dec., ¶ 6. This testimony differs from the allegations of the complaint, which allege she worked three shifts per week during the first period, and five shifts per week during the second period. Am. Compl., ¶ 26. The Court will calculate damages based on the allegations in the pleadings. Fed.R.Civ.P. 54(c).
C. Spread-of-Hours Pay
Under New York law, restaurant employers are required to pay one additional hour of pay at the minimum hourly rate where the spread-of-hours is greater than ten. 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. Accordingly, the spread-of-hours regulation applies to Defendants.
Plaintiff alleges she worked ten hours per day but does not allege she worked in excess of ten hours. Am. Compl., ¶ 26. Thus, Plaintiff did not sufficiently plead entitlement to spread-of-hours pay.
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 $50.00 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 $50.00 per day but may not exceed $5,000).
Plaintiff sufficiently pleaded that Defendants failed to comply with NYLL § 195(1)(a) and § 195(3). Am. Compl. ¶¶ 55-57. Plaintiff, nevertheless, lacks 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)). Plaintiff fails to allege an injury in fact sufficient to confer standing and has not demonstrated how her lack of notice resulted in an injury greater than Defendants' minimum wage and overtime violations. Nor has Plaintiff identified an informational injury with consequences beyond this lawsuit. Accordingly, Plaintiff cannot recover under the NYLL wage notice and statement provisions.
E. Improper Tip Practices
Finally, Plaintiff alleges that Defendants failed to pay her for the credit card tips that she earned. Am. Compl., ¶ 46. Defendants were not entitled to “demand or accept, directly or indirectly, any part of the gratuities, received by [Plaintiff], or retain any part of a gratuity or of any charge purported to be a gratuity for [her].” N.Y. Lab. Law § 196-d. Accordingly, Defendants are liable for unlawfully withholding tips from Plaintiff. See Jin M. Cao v. Wu Liang Ye Lexington Rest., Inc., No. 08-cv-3725 (DC), 2010 WL 4159391, at *4 (S.D.N.Y. Sept. 30, 2010) (finding similarly situated plaintiffs to be “entitled to the return of the unlawful deductions made from their tips ....”)
III. Damages
Because I find that Plaintiff has 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). Plaintiff sufficiently pleaded that Defendants violated the minimum wage and overtime provisions of both the FLSA and NYLL. But she is entitled to recover 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).
A court has discretion to award damages under New York or federal law, 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, Plaintiff's 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's Unpaid Minimum Wages
Plaintiff alleges that from April 18-May 10, 2021 (or 3.14 weeks), she worked three 10-hour shifts per week, and from May 11-June 8, 2021 (or 4.14 weeks), she worked five 10-hour shifts per week. Thus, the correct minimum wages due for the first 40 hours worked each week would have been $3,897, calculated as 30 hours per week x $15 hourly rate x 3.14 weeks = $1,413, plus 40 hours per week x $15 hourly rate x 4.14 weeks = $2,484. But Defendants are entitled to a credit of $1,204.80, calculated as $40 x 3 shifts x 3.14 weeks = $376.8, plus $40 x 5 shifts x 4.14 weeks = $828. Thus, Plaintiff is entitled to a minimum wage backpay of $2,692.20.
2. Plaintiff's Unpaid Overtime Compensation
During the last four weeks of her employment, Plaintiff should have been paid $22.50 per hour for the 10 overtime hours she worked each week. Thus, Plaintiff is entitled to an overtime backpay of $931.50, calculated as 10 OT hours per week x $22.50 hourly rate x 4.14 weeks.
3. Recovery of Unlawfully Withheld Tips
As previously discussed, Defendants are liable for unlawfully withholding Plaintiff's tips. Plaintiff estimates her tips to a reasonable degree of certainty. She estimates that the average table bill was $50 and that she would attend to approximately 45 tables per shift, 40 of which would pay by credit card. Montalvo Decl., ¶ 16. Thus, the total credit bills for the tables Plaintiff serviced is $60,240, calculated as $50 x 40 tables x 3 shifts x 3.14 weeks = $18,840, plus $50 x 40 tables x 5 shifts x 4.14 weeks = $41,400. Assuming a 15% tip rate, Plaintiff is entitled to $9,036.00 in withheld tips.
Plaintiff's counsel estimates that Plaintiff's withheld tips equals $7,400, calculated as $300 in tips per shift ($50 x 40 tables x 15%), and then assumes 27 shifts. But because counsel calculation likely assumes an incorrect shift schedule, see supra note 2, the Court does not adopt counsel's calculation.
B. Liquidated Damages
An employer who violates the FLSA or NYLL shall be liable to the employee for all minimum and overtime wages kept plus an “additional equal amount as liquidated damages.” 29 U.S.C. § 216(b); N.Y. Lab. Law § 198(1-a). The NYLL also provides for unlawfully deducted or withheld tips to be recovered as liquidated damages at a rate of 100 percent. See N.Y. Lab. Law § 663(1); see also Greathouse v. JHS Sec. Inc., No. 11-cv-7845 (PAE)(GWG), 2012 WL 5185591, at *3 (S.D.N.Y. Oct. 19, 2012) (the calculation for liquidated damages under the NYLL must include compensation for unlawful wage deductions), vacated and remanded on other grounds, 784 F.3d 105 (2d Cir. 2015).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, 643 F.3d at 366 (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 Plaintiff liquidated damages under NYLL only.
Plaintiff is entitled to an additional $12,659.70, representing 100% of her unpaid wages, overtime compensation, and improperly withheld tips.
C. 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, the Court selects May 13, 2021, (the midpoint between Plaintiff's start date of April 18, 2021, and end date of June 8, 2021). Although Plaintiff has not made any request for or any argument as to pre-judgment interest on this motion, I recommend Plaintiff be granted pre-judgment interest from May 13, 2021, on her total actual damages at the rate of nine percent per year, until the date of entry of judgment.
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). I recommend Plaintiff 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).
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).
Plaintiff requests a total of $22,449.50 in fees for 114.50 hours of attorney and paralegal work. ECF No. 71. Attorney Penn Dodson is the founding partner at AndersonDodson, P.C. (“AndersonDodson”). ECF No. 71, Ex. 1 at ¶ 12. She has practiced employment law since 2003 and worked as a junior partner at Goldberg & Dohan and has presented a number of employment law Continuing Legal Education programs through her membership with the National Employment Lawyers Association. Id. at ¶¶ 5-8. She requests an hourly rate of $450.00 for 16.5 hours of work. Id. at ¶2.
Plaintiff also seeks fees for the work performed by three paralegals and a client relations specialist. Jess Velez is a senior paralegal at AndersonDodson. Id. at ¶ 15. She received her paralegal certificate in 2016. Id. Frankie Brown was a senior paralegal at AndersonDodson from September 2018 through July 31, 2020, and earned her paralegal certificate in December 2018. Id. at ¶ 14. She returned to the firm in November 2021 while a 3L at the University of Georgia School of Law. Id. Plaintiff seeks an hourly rate of $175.00 for 82.6 hours of work performed by both Ms. Brown and Ms. Velez. Id. at ¶ 2. Callyn Carter has been a junior paralegal at AndersonDodson since July 9, 2021. Id. at ¶ 17. She graduated from the University of North Georgia in 2021 and assists other paralegals in various ways. Plaintiff seeks an hourly rate of $125.00 for 6.7 hours of her work. Id. at ¶ 2. Natalie Godoy worked as a bilingual client relations specialist at AndersonDodson from July 6, 2021, through August 30, 2021. Id. at ¶ 16. Plaintiff seeks an hourly rate of $95.00 for 8.6 hours of work. Id. at ¶ 2.
A. Reasonable Rates
“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). But see, e.g., Ashkinazi v. Sapir, No. 02-cv-0002 (RCC)(MHD), 2005 WL 1123732, at *3 (S.D.N.Y. May 10, 2005) (awarding $425 per hour to a partner in a small firm specializing in employment law, with 26 years of experience). Higher rates may, however, be awarded where they are “unopposed and awarded in the context of a default judgment.” Wan, 2021 WL 1905036 at *6. Given the passage of time and rising rates, this case's default posture, and Ms. Dodson's two decades of experience, I recommend that she be awarded an hourly rate of $450.
“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). Accordingly, I recommend that the senior paralegal rate be reduced to $125 and the junior paralegal rate be reduced to $100. Finally, the Court finds that requested rate of $95 for the client relations specialist should be reduced to $50 to be more in line with accepted rates for support staff. See Merck Eprova AG v. Gnosis S.P.A., No. 07-cv-5898 (RJS), 2011 WL 1142929, at *10 (S.D.N.Y. Mar. 17, 2011) (awarding a rate of $150 for support staff but noting that a “$50 per hour rate [is] generally used in this district”).
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, Plaintiff's attorney has submitted a billing invoice. ECF No. 72, Ex. 2. This time reflects that Ms. Dodson performed 16.5 hours of work, Ms. Velez and Ms. Brown collectively performed 82.6 hours of work, Ms. Carter performed 6.7 hours of work, and Ms. Godoy worked 8.6 hours of work. Id. Thus, approximately 85% of all time billed was performed by paralegals and support staff.
The number of hours reflected in the submitted timesheets are reasonable with respect to the work performed by Ms. Dodson, and the Court has identified no inconsistencies or redundancies in her entries.
Yet, the Court finds unreasonable the majority of the 97.9 hours of work performed by Ms. Velez, Ms. Brown, Ms. Carter, and Ms. Godoy, the paralegals and client relations specialist in this matter. As a general matter, “[p]aralegal work. . . is not compensable if it is purely clerical.” Kahlil v. Original Old Homestead Rest., Inc., 657 F.Supp.2d 470, 477 (S.D.N.Y. 2009). Non-compensable clerical work includes “downloading documents, transmitting correspondence and filing” as well as organizing files, reviewing pretrial procedures, and reviewing attachments to an e-mail. Agudelo v. E & D LLC, No. 12-cv-960 (HB), 2013 WL 1401887, at *3 (S.D.N.Y. Apr. 4, 2013) (citing Kahlil, 657 F.Supp.2d at 477).
With the exception of the 2.3 hours Ms. Godoy billed performing client intake, all of her billed hours constitute non-compensable clerical work and should not be awarded.
Ms. Godboy billed for work such as “secure receipts” and “organize cdox.” She also billed for “%Beautify Clio Matter” and an “Additional Plaintiff's Intake for Avery Jimenez,” both of which do not align with this case. ECF No. 72-2, at 1.
Similarly, I find that Ms. Carter should be compensated only for the 2.2 hours she appears to have drafted e-mails and documents in this matter.
Ms. Carter's entries also include hours billed for “Beautify CDOX” “Propound,” and “Pull tracking for proof of service.” ECF No. 72-2, at 2.
The majority of the hours billed by Ms. Velez and Ms. Brown also reflect noncompensable clerical work, such as reviewing correspondence, e-mailing clients, filing and downloading documents on the docket, researching procedural rules, and delegating tasks. ECF No. 72, Ex. 2 at 2-14. Rather than make “minute-by-minute deductions,” I recommend that the senior paralegal work performed by Ms. Velez and Ms. Brown be reduced by 75 percent Agudelo, 2013 WL 1401887, at *3. Applying this discount, I find that Ms. Velez and Ms. Brown should be compensated only for 20.65 hours.
Ms. Velez has vague entries such as “worked on DL,” “called OP,” “managed tasks y delegated out,” and “nagged CL.” ECF No. 72-2, at 3. She allegedly spent 1.6 hours filing the complaint and civil cover sheet on ECF. ECF No. 72-2, at 4. Ms. Velez also appears to have billed nearly every workday from at least the filing of the complaint through to the default submissions, with many days billing multiple “0.1” or “0.2” entries. The practice of billing short tasks at a six-minute increment is disfavored, and the daily billing on an inactive case is suspicious.
Accordingly, this Court finds that Plaintiff may recover attorney's fees in the total amount of $10,391.25, representing $7,475 for Ms. Dodson, $2,581.25 for senior paralegals, $220 for junior paralegals, and $115 for support staff.
C. Costs and Remedies
Plaintiff also seeks $1,125.19 in costs, which consists of $5.00 in research fees, $450.00 in filing fees, $156.19 in postage fees, $50.00 in case management fees, and $509.00 in service of process 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 Envtl., 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), adopted, 2011 WL 5843757 (S.D.N.Y. Nov. 18, 2011).
CONCLUSION
I recommend that the Court find Defendants liable for $36,835.40 plus applicable interest, as follows:
(1) $12,659.70 in back pay and unlawfully deducted tips damages to Plaintiff plus nine percent prejudgment simple interest calculated from May 13, 2021, to the date of judgment;
(3) $12,659.70 in liquidated damages to Plaintiff;
(5) $10,391.25 in attorneys' fees; and
(6) $1,125.19 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 under 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). These objections shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Jennifer L. Rochon at the United States Courthouse, 500 Pearl, 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 Rochon. 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. Civl. P. 6(a), 6(d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).