Opinion
16-CV-11 (WHP) (JLC)
02-24-2017
WILHELM SCHALAUDEK and HUTMAN TABTI, Plaintiffs, v. CHATEAU 20TH STREET LLC, DUAL GROUPE ENTERTAINMENT LLC, DUAL GROUPE, LLC, MICHAEL WAINSTEIN, PHILIPPE O. BONDON, DEREK KOCH and DANIEL KOCH, Defendants.
REPORT & RECOMMENDATION JAMES L. COTT, United States Magistrate Judge To the Honorable William H. Pauley, III, United States District Judge:
On August 23, 2016, the Court entered a default judgment in this wage-and-hour action brought under the Fair Labor Standards Act ("FLSA") and New York State Labor Law ("NYLL") in favor of the plaintiffs, Wilhelm Schalaudek and Hutman Tabti, and against defendants Dual Groupe Entertainment LLC, Dual Groupe, LLC, Michael Wainstein, and Philippe O. Bondon (collectively, the "Defaulting Defendants"). (Dkt. No. 37). This matter was then referred to me to conduct an inquest into damages on August 24, 2016. (Dkt. No. 38).
For the reasons that follow, I recommend that plaintiff Schalaudek be awarded damages against the Defaulting Defendants in the amount of $1,856 in unpaid minimum wages; $6,725.32 in withheld tips; $3,800 in statutory damages for NYLL wage-statement and wage-notice violations; $8,581.32 in liquidated damages under NYLL only; and $3,365 in attorney's fees and costs, for a total amount of $24,327.64, plus prejudgment interest as set out below. As for Tabti, I recommend that he be awarded damages against the Defaulting Defendants in the amount of $5,220 in unpaid minimum wages; $435 in unpaid overtime compensation; $9,000 in unpaid tips; $3,000 in statutory damages for NYLL wage-statement and wage-notice violations; $14,655 in liquidated damages under NYLL only; and $3,365 in attorney's fees and costs, for a total amount of $35,675, plus prejudgment interest as set out below.
I. BACKGROUND
A. Overview
In 2013, both plaintiffs worked as servers at defendants' restaurant Chateau Cherbuliez, which was located at 47 West 20th Street in Manhattan. Complaint, dated Jan. 4, 2016, Dkt. No. 1 ("Compl.") ¶¶ 14, 29, 33; Plaintiffs' Proposed Findings and Conclusions of Law, dated Sept. 19, 2016, Dkt. No. 45 ("Pls.' Findings and Conclusions") ¶¶ 23, 31. Plaintiffs' rate of compensation was $5 per hour plus tips. Pls.' Findings and Conclusions ¶ 31. According to plaintiffs, however, the restaurant unlawfully withheld their hourly wages and their tips. Id. ¶¶ 32-37. Plaintiffs also assert that they never received notices of wages and wage statements in violation of NYLL. Compl. ¶¶ 66, 68; Declaration of Wilhelm Schalaudek, dated Sept. 16, 2016, Dkt. No. 45-2 ("Schalaudek Decl.") ¶¶ 11, 12; Declaration of Hutman Tabti, dated Sept. 16, 2016, Dkt. No. 45-3 ("Tabti Decl.") ¶¶ 10, 11.
As a result of these violations, and in light of the Defaulting Defendants' default, plaintiff Shalaudek seeks $1,280 in unpaid wages; so-called stacked liquidated damages in the amount of $2,560 ($1,280 x 2) for the failure to pay these wages in willful violation of the FLSA and NYLL; $6,725.32 in unpaid tips; liquidated damages in the amount of $6,725.32 for the willful retention of these tips in violation of NYLL; $1,300 for violations of NYLL's wage-notice requirements; $2,500 for violations of NYLL's wage-statement requirements; prejudgment interest under NYLL in the amount of $2,309; and attorney's fees in the amount of $3,993.75. Pls.' Findings and Conclusions ¶ 74.
Plaintiff Tabti seeks $3,900 for unpaid wages; stacked liquidated damages in the amount of $7,800 ($3,900 x 2) for the willful failure to pay these wages in violation of the FLSA and NYLL; $9,000 in unpaid tips; liquidated damages in the amount of $9,000 for the willful retention of these tips in violation of NYLL; $1,000 for violations of NYLL's wage-notice requirement; $2,000 for violations of NYLL's wage-statement requirements; prejudgment interest in the amount of $3,152.19; and attorney's fees in the amount of $3,993.75. Id. ¶ 75.
Although I recommend that plaintiffs be awarded an amount of damages in each category that they identify, their calculations are often flawed. Consequently, as explained below, the amount of damages that plaintiffs are entitled to differs from the amount sought in their inquest submissions.
B. Procedural History
After filing their complaint in January 2016, plaintiffs submitted affidavits certifying that all defendants were served in March 2016 with a summons and the complaint. See Affidavits of Service, Dkt. Nos. 6-12. None of the defendants answered or otherwise responded to the complaint, though defendant Derek Koch, proceeding pro se, filed a notice of appearance on April 1, 2016. (Dkt. No. 13). By Order of Reference dated April 5, 2016 (Dkt. No. 15), the claims against defendants Derek and Daniel Koch were referred to me for settlement. Prior to the scheduled settlement conference, plaintiffs notified the Court that they had reached a settlement in principle with these two defendants. Letter-Motion, dated May 16, 2016, Dkt. No. 22. Before plaintiff Schalaudek would agree to finalize a settlement with them, however, he requested that he first be permitted to wait for a ruling on plaintiffs' motion for default judgment against the Defaulting Defendants. Id. In light of these developments, the scheduled settlement conference was adjourned sine die. (Dkt. No. 23). Plaintiff Tabti thereafter reached a settlement with defendants Derek and Daniel Koch (Dkt. No. 50), which was later approved as modified. (Dkt. No. 52). Trial on Schalaudek's claims against the Kochs is currently scheduled to begin on April 17, 2017. (Dkt. No. 54).
Through papers dated July 8, 2016 (Dkt. Nos. 34-36), plaintiffs moved for default against the Defaulting Defendants. Although opposition papers were due by July 22, 2016 (Dkt. No. 26), the Defaulting Defendants failed to respond to the motion. Accordingly, the Court entered default judgment against them on August 23, 2016. (Dkt. No. 37).
By Amended Order of Reference dated August 24, 2016 (Dkt. No. 38), this case was referred to me to conduct an inquest on plaintiffs' damages against the Defaulting Defendants. On September 21, 2016, plaintiffs submitted proposed findings of fact and conclusions of law and supporting materials. Pls.' Findings and Conclusions; Declaration of David Pernas, dated Sept. 16, 2016, Dkt. No. 45-1 ("Counsel Decl."); Schalaudek Decl.; Tabti Decl.; Affidavit of Daniel Koch, dated Sept. 2, 2016, Dkt. No. 45-1 ("Koch Aff."). The Defaulting Defendants' responses to these submissions were due on October 10, 2016 (Dkt. No. 39), but none of the Defaulting Defendants has responded to date.
C. Facts Established as a Result of Defendants' Default
"In conducting a damages inquest, the Court accepts as true all of the factual allegations of the complaint, except those relating to damages." See, e.g., Kernes v. Glob. Structures, LLC, No. 15-CV-659 (CM) (DF), 2016 WL 880199, at *3 (S.D.N.Y. Mar. 1, 2016) (citing Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 64-65 (2d Cir. 1981)). Plaintiffs "bear[] the burden of establishing [their] entitlement to recovery and thus must substantiate [their] claim with evidence to prove the extent of [their] damages." Dunn v. Advanced Credit Recovery Inc., No. 11-CV-4023 (PAE) (JLC), 2012 WL 676350, at *2 (S.D.N.Y. Mar. 1, 2012) (citing Greyhound Exhibitgroup v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992)), adopted by, 2012 WL 1114335 (S.D.N.Y. Apr. 3, 2012). At the same time, plaintiffs are entitled to all reasonable inferences from the evidence presented in support of their damages claims. See, e.g., Au Bon Pain Corp., 653 F.2d at 65. Consequently, the Court accepts the following facts, which are drawn from the complaint and plaintiffs' inquest submissions, as true for purposes of this inquest.
The Defaulting Defendants, who shared control over employees like plaintiffs and who had common policies and practices as to wages and hours, were plaintiffs' employers as defined by NYLL and the FLSA. Compl. ¶¶ 27, 43, 55; Pls.' Findings and Conclusions ¶ 24. The restaurant Chateau Cherbuliez was wholly owned by defendant Chateau 20th Street LLC, which was in turn wholly owned by defendant Dual Groupe, LLC, which was in turn wholly owned by non-party Dual Groupe Hospitality LLC. Koch Aff. ¶ 2. Defendant Wainstein, who was a managing member of defendant Dual Groupe LLC, exercised control over the restaurant's finances, determined when employees like plaintiffs would be paid, and asked employees like plaintiffs to work unpaid in exchange for the promise of future payments. Pls.' Findings and Conclusions ¶¶ 25-26, 30; Koch Aff. ¶ 2. Defendant Bondon, a member of defendant Dual Groupe, LLC and a restaurant manager, actively participated in the business of the Chateau Cherbuliez restaurant and exercised control over its employees. Id. ¶¶ 26, 29; Koch Aff. ¶ 3.
Although Chateau 20th Street LLC has never appeared in this action, plaintiffs did not move for default judgment against this defendant and so default judgment has not been entered against it. (Dkt. Nos. 34-37). Moreover, plaintiffs have dropped Chateau 20th Street LLC from the caption of their proposed findings and conclusions. Additionally, the complaint and the inquest papers say little specifically about the relationship of defendant Dual Groupe Entertainment, LLC to the restaurant, other than to state that defendant Wainstein controlled this entity. See Koch Aff. ¶ 4.
1. Plaintiffs' Work Schedules and Compensation
Plaintiff Schalaudek worked as a server at Chateau Cherbuliez from January 2013 to July 2013. Compl. ¶¶ 28-29; Schalaudek Decl. ¶ 2. His rate of compensation was $5.00 per hour plus tips. Compl. ¶ 30; Pls.' Findings and Conclusions ¶ 31; Schalaudek Decl. ¶ 3. Schalaudek estimates that, between May and July 2013, the Defaulting Defendants withheld wages and credit-card tips from him. Compl. ¶ 31; Pls.' Findings and Conclusions ¶ 32; Schalaudek Decl. ¶¶ 4-6. During these eight weeks, he worked an estimated 256 hours without pay, and the Defaulting Defendants withheld from him an estimated $6,725.32 in credit-card tips. Pls.' Findings and Conclusions ¶¶ 33-34; Schalaudek Decl. ¶¶ 5-7.
Plaintiff Tabti worked as a server at Chateau Cherbuliez for 20 weeks between July 2013 and December 2013. Compl. ¶¶ 32-33; Tabti Decl. ¶ 2. Like Schalaudek, his rate of compensation was $5.00 per hour plus tips. Compl. ¶ 34; Pls.' Findings and Conclusions ¶ 31; Tabti Decl. ¶ 3. The Defaulting Defendants withheld from him all hourly wages that he earned during his 20 weeks at the restaurant as well as an estimated $9,000 in credit-card tips. Compl. ¶ 35; Pls.' Findings and Conclusions ¶ 35; Tabti Decl. ¶¶ 4-6. Tabti estimates that he worked for 32 hours per week for 10 weeks, 40 hours per week for five weeks, and 48 hours per week for five weeks. Tabti Decl. ¶ 6. In addition to not receiving regular wages, he did not receive overtime compensation for the five weeks during which he worked more than 40 hours. Tabti Decl. ¶ 6; Compl. ¶ 36.
According to the complaint, plaintiffs also worked at special events promoted by the Defaulting Defendants outside of the restaurant. Compl. ¶ 37. For some of these events, the Defaulting Defendants charged patrons tips for services but did not pay any such tips to plaintiffs. Id. ¶ 38. The extent to which hours worked at these events are included in plaintiffs' damage estimates is not clear.
2. Failure to Give Notice of Minimum-Wage Rights and Failure to Provide Wage Statements and Wage Notices
The Defaulting Defendants failed to post notices explaining the rights of employees to a minimum wage under the FLSA and NYLL, and, as a result, plaintiffs were uninformed of their rights during their employment. Compl. ¶¶ 39, 66, 68; Pls.' Findings and Conclusions ¶¶ 43-44, 66-67; Schalaudek Decl. ¶¶ 11-12; Tabti Decl. ¶¶ 10-11. In violation of the Wage Theft Prevention Act, the Defaulting Defendants failed to furnish to plaintiffs, at the time of their hiring, a notice containing their rate or rates of pay and the basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission or other; allowances, if any, claimed as part of the minimum wage, including tip, meal, or lodging allowances; the regular pay day designated by the employer; any "doing business as" names used by the employer; the physical address of the employer's main office or principal place of business and a mailing address if different; and the telephone number of the employer. Pls.' Findings and Conclusions ¶ 43; see also NYLL § 195(1).
Also in violation of the Wage Theft Prevention Act, the Defaulting Defendants failed to furnish plaintiffs with a wage statement at the time of each wage payment that included the information required by NYLL, such as: the dates of work covered by that payment of wages; name of employee; name of employer; address and phone number of employer; rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission or other; the regular hourly rate or rates of pay; the overtime rate or rates of pay; the number of regular hours worked and the number of overtime hours worked; gross wages; deductions; allowances, if any, claimed as part of the minimum wage; and net wages. Pls.' Findings and Conclusions ¶ 44; see also NYLL § 195(3).
II. DISCUSSION
A. Burden of Proof on Damages
"Even when a default judgment is warranted based on a party's failure to defend, the allegations in the complaint with respect to the amount of the damages are not deemed true. The district court must instead conduct an inquiry in order to ascertain the amount of damages with reasonable certainty." Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999) (citation omitted). "[E]ven when the defendant[s] default[] and [are] not present to object," plaintiffs have the burden of establishing their entitlement to "damages . . . based on admissible evidence." House v. Kent Worldwide Mach. Works. Inc., 359 F. App'x 206, 207 (2d Cir. 2010). To establish damages upon default, plaintiffs must demonstrate that the "compensation sought relate[s] to the damages that naturally flow from the injuries pleaded." Greyhound Exhibitgroup, 973 F.2d at 159.
"In determining damages not susceptible to simple mathematical calculation, Federal Rule of Civil Procedure 55(b)(2) gives courts discretion to determine whether an evidentiary hearing is necessary or whether to rely on detailed affidavits or documentary evidence." Laboratorios Rivas, SRL v. Ugly & Beauty, Inc., No. 11-CV-5980 (RA) (JLC), 2013 WL 5977440, at *5 (S.D.N.Y. Nov. 12, 2013), adopted by, 2014 WL 112397 (S.D.N.Y. Jan. 8, 2014) (internal quotation marks omitted). The Second Circuit has long approved the process of conducting an inquest by affidavit, without an in-person court hearing, "'as long as [the court has] ensured that there was a basis for the damages specified in the default judgment.'" Transatl. Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (quoting Fustok v. ContiCommoditv Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989)). The Court concludes here that "a hearing is not necessary, as documents submitted in this action provide a 'sufficient basis from which to evaluate the fairness' of the damages requested." Am. Jewish Comm. v. Berman, No. 15-CV-5983 (LAK) (JLC), 2016 WL 3365313, at *4 (S.D.N.Y. June 15, 2016) (quoting Fustok, 873 F.2d at 40), adopted by, 2016 WL 4532201 (S.D.N.Y. Aug. 29, 2016).
An employee seeking to recover unpaid wages "'has the burden of proving that he performed work for which he was not properly compensated.'" Jiao v. Chen, No. 03-CV-165 (DF), 2007 WL 4944767, at *2 (S.D.N.Y. Mar. 30, 2007) (quoting Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 689 (1946)). Under both state and federal law, an employer is required to maintain "records of the persons employed by him and of the wages, hours, and other conditions and practices of employment maintained by him." 29 U.S.C. § 211(c); see also 12 N.Y. Comp. Codes R. & Regs. ("NYCRR") § 142-2.6(a) ("Every employer shall establish, maintain and preserve for not less than six years, weekly payroll records . . . ."). In the case of a default judgment, the "defaulting defendant[s] deprive the plaintiff[s] of the necessary employee records required by the FLSA, thus hampering the plaintiff[s'] ability to prove [their] damages" and consequently "plaintiff[s] may meet [their] burden of proof by relying on recollection alone to establish that [they] performed work for which [they were] improperly compensated." Kernes, 2016 WL 880199, at *6 (internal alterations and quotation marks omitted).
"[T]he employee should not speculate, but may rely on his present memory and recollection to carry the burden." Maldonado v. La Nueva Rampa, Inc., No. 10-CV-8195 (LLS) (JLC), 2012 WL 1669341, at *3 (S.D.N.Y. May 14, 2012), adopted by, Order, dated Aug. 9, 2012 (Dkt. No. 20) (internal citations and quotation marks omitted). "An affidavit that sets forth the number of hours worked is sufficient." Id.; Angamarca v. Pita Grill 7 Inc., No. 11-CV-7777 (JGK) (JLC), 2012 WL 3578781, at *3 (S.D.N.Y. Aug. 2, 2012), adopted by, Order, dated Dec. 14, 2012 (Dkt. No. 39). Absent "rebuttal by defendants . . . [the employee's] recollection and estimates of hours worked are presumed to be correct." Kernes, 2016 WL 880199, at *6 (internal citations and quotation marks omitted) (alterations in original).
B. Statute of Limitations
Plaintiffs Schalaudek and Tabti began working for the Defaulting Defendants in January 2013 and July 2013, respectively, and they filed their complaint raising claims under the FLSA and NYLL on January 4, 2016. Compl. ¶¶ 28, 32; Schalaudek Decl. ¶ 2; Tabti Decl. ¶ 2. The statute of limitations is six years under NYLL, two years under the FLSA for standard violations, and three years under the FLSA for willful violations. See NYLL § 663(3); 29 U.S.C. § 255(a). Plaintiffs allege that the Defaulting Defendants willfully failed to pay them the applicable minimum wage and tips owed to them, and that they willfully failed to pay Tabti overtime. Compl. ¶¶ 31, 35-36, 41-42. The Court accepts these allegations as true, given the Defaulting Defendants' default. See, e.g., Herrara v. 12 Water St. Gourmet Cafe, Ltd., No. 13-CV-4370 (JMF) (RLE), 2016 WL 1274944, at *4 (S.D.N.Y. Feb. 29, 2016) (collecting cases), adopted by, 2016 WL 1268266 (S.D.N.Y. Mar. 31, 2016). Consequently, plaintiffs' respective employment periods are entirely covered by NYLL's six-year statute of limitations and by the FLSA's three-year statute of limitations for willful violations.
Schalaudek does not specify his exact start date, stating only that he began working in January 2013. Schalaudek Decl. ¶ 2. The precise date, however, is immaterial for purposes of the FLSA's three-year statute of limitations for willful violations, as the first asserted FLSA violation did not occur until May 2013, when the Defaulting Defendants are alleged to have first withheld his hourly wages and tips. Id. ¶¶ 6-7.
Although "plaintiffs may not recover under both the FLSA and the NYLL for the same injury, courts allow plaintiffs to recover under the statute that provides for the greatest relief." Ni v. Bat-Yam Food Servs. Inc., No. 13-CV-7274 (ALC) (JCF), 2016 WL 369681, at *1 (S.D.N.Y. Jan. 27, 2016); see also, e.g., Castillo v. RV Transp., Inc., No. 15-CV-0527 (LGS), 2016 WL 1417848, at *3 (S.D.N.Y. Apr. 11, 2016); Maldonado, 2012 WL 1669341, at *5. Here, as explained below, NYLL consistently provides for equal or greater relief relative to the FLSA and, accordingly, the Court recommends that plaintiffs be awarded damages under NYLL. C. Unpaid Minimum Wage, Overtime Compensation, and Tip Retention
Both plaintiffs allege that the Defaulting Defendants failed to pay them the state or federal minimum wage and unlawfully retained their credit-card tips from customers. Pls.' Findings and Conclusions ¶¶ 32, 35, 37. Additionally, Tabti asserts that he worked more than 40 hours per week for five weeks without receiving overtime compensation. Compl. ¶ 36; Tabti Decl. ¶ 6.
1. Legal Standards
Under both federal and state law, employers must pay employees a statutory minimum wage. See 29 U.S.C. § 206(a)(1); 12 NYCRR § 146-1.2. The FLSA requires employers to pay employees at least the federal minimum wage for every hour worked, 29 U.S.C. § 206, or the state minimum wage if it exceeds the federal minimum wage. See 29 U.S.C. § 218(a). At all times relevant here, both the state and federal minimum wage was $7.25 per hour. NYLL § 652(1) (providing that the minimum wage is "$7.15 on and after January 1, 2007, . . . or, if greater, such other wage as may be established by federal law pursuant to 29 U.S.C. section 206"); 29 U.S.C. § 206(a)(1)(c) (increasing federal minimum wage to $7.25 per hour as of July 24, 2009); see, e.g., Chen v. Chan, 615 F. App'x 10, 13 (2d Cir. 2015); Laboy v. Office Equip. & Supply Corp., No. 15-CV-3321 (RA) (AJP), 2016 WL 5462976, at *4 (S.D.N.Y. Sept. 29, 2016), adopted by, 2016 WL 6534250 (S.D.N.Y. Nov. 2, 2016).
Even though plaintiffs assert that they were not paid the proper minimum wage, they calculate their hourly wages at $5.00 hour, which was the hourly rate that the Defaulting Defendants had agreed to pay them. Pls.' Findings and Conclusions ¶¶ 45, 47. Given that the Defaulting Defendants were ineligible to take a tip credit (as discussed below), plaintiffs were entitled to $7.25 per hour. Consequently, the Court will calculate their damages at this rate. See Yuquilema v. Manhattan's Hero Corp., No. 13-CV-461 (WHP) (JLC), 2014 WL 4207106, at *3-4 (S.D.N.Y. Aug. 26, 2014) (calculating damages based on the 2007-08 state minimum wage of $7.15 and rejecting counsel's erroneous rate of $6.75), adopted by, 2014 WL 5039428 (S.D.N.Y. Sept. 30, 2014).
Under federal and state law, employers may compensate tipped employees at a lower hourly rate by crediting a portion of their tips against the minimum wage. 29 U.S.C. § 203(m); 12 NYCRR § 146-1.3(b); see, e.g., Andrade, 2016 WL 3141567, at *4. "To be eligible to take a tip credit, however, the employer must satisfy certain prerequisites." Kim v. Kum Gang, Inc., No. 12-CV-6344 (MHD), 2015 WL 2222438, at *23 (S.D.N.Y. Mar. 19, 2015). Among other conditions, the employer "must inform the employee of the statutory requirements governing tip credits." Id. Here, the Defaulting Defendants failed to meet this requirement and are therefore ineligible for the tip credit. Compl. ¶¶ 39, 66, 68; Pls.' Findings and Conclusions ¶¶ 43-44, 66-67; Schalaudek Decl. ¶¶ 11-12; see, e.g., Cao v. Wu Liang Ye Lexington Rest., Inc., No. 08-CV-3725 (DC), 2010 WL 4159391, at *2 (S.D.N.Y. Sept. 30, 2010) (employers ineligible for "tip credit" given lack of notice); Ke v. Saigon Grill. Inc., 595 F. Supp. 2d 240, 254 (S.D.N.Y. 2008) (same).
While plaintiffs do not specifically allege that they did not receive notice of the tip-credit rules, they do allege that they were uninformed of their minimum-wage rights generally. Compl. ¶¶ 39, 66, 68; Pls.' Findings and Conclusions ¶¶ 43-44, 66-67; Schalaudek Decl. ¶¶ 11-12; Tabti Decl. ¶¶ 10-11. It is fair to assume that by failing to notify plaintiffs of their minimum-wage rights, defendants also failed to properly notify them of the tip-credit rules, as notice of the tip-credit rules requires notice of minimum-wage rights.
Employers are also required to provide notice to be eligible for a tip credit under NYLL. 12 NYCRR § 146-1.3 ("An employer may take a credit towards the basic minimum hourly rate if a service employee or food service worker . . . has been notified of the tip credit."). "In particular," prior to the start of employment, "an employer seeking to apply a tip credit must provide the employee with written notice stating (1) the amount of tip credit to be claimed against the minimum wage and (2) that extra pay is required if the employee's tips are insufficient to bring his or her pay up to meet the minimum wage." Romero v. Anjdev Enterprises, Inc., No. 14-CV-457 (AT), 2017 WL 548216, at *9 (S.D.N.Y. Feb. 10, 2017) (citing 12 NYCRR §§ 146-1.3, 146-2.2(a)). "Acknowledgement of that notice, signed by the employee, must be retained for six years." Id. (citing 12 NYCRR § 146-2.2(c)). Additionally, with exceptions not relevant here, NYLL does not permit an employer to "demand or accept, directly or indirectly, any part of the gratuities, received by an employee." NYLL § 196-d.
Finally, both federal and state law also require employers to pay employees one and one-half times the minimum wage for time worked in excess of 40 hours per week. 29 U.S.C. § 207(a)(1); 12 NYCRR §§ 146-1.4, 142-2.2; Kernes, 2016 WL 880199, at *3 ("[A]n employee is entitled to be paid for overtime hours (i.e., hours exceeding 40 per week), at a 'rate not less than one and one-half times the regular rate at which [the employee] is employed.'") (quoting 29 U.S.C. § 207(a)(1)); Herrara, 2016 WL 1274944, at *5 (citing 29 U.S.C. § 207(a) and 12 NYCRR § 146-1.4). Appropriate overtime wages are "calculated by multiplying [an employee's] regular hourly rate (or the minimum wage rate, if his regular hourly rate falls below the minimum wage) by one and one-half. That rate is then multiplied by the number of hours in excess of forty hours the employee worked each week." Rosendo v. Everbrighten Inc., No. 13-CV-7256 (JGK) (FM), 2015 WL 1600057, at *4 (S.D.N.Y. Apr. 7, 2015), adopted by, 2015 WL 4557147 (S.D.N.Y. July 28, 2015).
2. Application
a. Schalaudek's Unpaid Wages and Tips
During Schalaudek's employment at Chateau Cherbuliez, which lasted from January to July 2013, he alleges that he was not paid his hourly wages or credit-card tips for eight weeks—specifically, the weeks of May 19, May 26, June 9, June 16, June 23, July 7, July 21, and July 28, 2013. Compl. ¶ 31; Schalaudek Decl. ¶¶ 4-7. Based on a review of the restaurant's payroll records, and as memorialized in an email to former Chateau Cherbuliez manager Paul Drohan dated December 22, 2013, Schalaudek determined the hours that he worked during the first four of these weeks. Schalaudek Decl. ¶¶ 5, 7, Ex. A. Specifically, he determined that he worked 32 hours during the week of May 19; 24 hours during the week of May 26; 40 hours during the week of June 9; and 32 hours during the week of June 16. Id. ¶ 7, Ex. A. In total, he worked 128 hours over these first four weeks, averaging 32 hours per week. Schalaudek estimates that he worked the same number of hours for the remaining four weeks (that is, the weeks of June 23, July 7, July 21, and July 28). Id. ¶ 7. "[I]n the absence of rebuttal by defendants, plaintiffs' recollection and estimates of hours worked are presumed to be correct." Liu v. Jen Chu Fashion Corp., No. 00-CV-CV-4221 (RJH) (AJP), 2004 WL 33412, at *3 (S.D.N.Y. Jan. 7, 2004). Consequently, the Court assumes that Schalaudek worked a total of 256 hours (128 x 2, or 32 x 8). Because Schalaudek's hourly rate of $5 is below the applicable minimum wage of $7.25 per hour and because the Defaulting Defendants failed to notify him as to the amount of tip credit that would be claimed against the minimum wage, the Court calculates Schalaudek's wages at $7.25 per hour. Schalaudek Decl. ¶¶ 11, 12; Compl. ¶ 39. In doing so, the Court concludes that Schalaudek is entitled to $1,856 ($7.25 x 256) in unpaid wages.
Schalaudek omits the week of June 30, 2013 from the list of weeks for which he was not paid. Schalaudek Decl. ¶¶ 6-7, Ex. A.
Schalaudek also alleges that he was not paid credit-card tips from customers for the same eight weeks. Id. ¶ 6. Based on a review of payroll records, and as memorialized in his December 22 email to a former Chateau Cherbuliez manager, Schalaudek determined the amount of tips owed to him for the first four weeks. Id. ¶¶ 5-6, Ex. A. Specifically, he alleges that the Defaulting Defendants withheld $1,396.00 in credit-card tips from him for the week of May 19; $929.54 for the week of May 26; $537.38 for the week of June 9; and $499.74 for the week of June 16. Id. In total, Schalaudek earned $3,362.66 in credit-card tips over these four weeks, averaging $840,665 per week. Although Schalaudek does not submit precise figures for the remaining four weeks (that is, the weeks of June 23, July 7, July 21, and July 28), he estimates that he earned the same amount of tips during this period as the previous four-week period. Id. ¶ 6. The Court accepts this estimate and recommends that Schalaudek be awarded $6,725.32 in tips ($3,362.66 x 2, or $840,665 x 8).
b. Tabti's Unpaid Wages, Overtime, and Tips
Tabti contends that he was not paid at all for the entire 20 weeks of his employment at Chateau Cherbuliez, which lasted from July 2013 to December 2013. Compl. ¶ 35; Tabti Decl. ¶¶ 2, 4. Based on his recollection, he estimates that he worked a total of 760 hours over these 20 weeks, specifying that he worked an estimated 32 hours per week for 10 weeks, 40 hours for five weeks, and 48 hours for the remaining five weeks. Tabti Decl. ¶ 6. Thus, Tabti estimates that he worked a total of 720 regular hours (32 hours x 10 weeks + 40 hours x 10 weeks). Because Tabti worked more than 40 hours by eight hours for five weeks, he is eligible for overtime compensation for a total of 40 hours (8 hours x 5 weeks). Further, given that Tabti's hourly wage of $5 is less than the applicable minimum wage of $7.25 per hour and that the Defaulting Defendants failed to notify him as to the amount of tip credit that would be claimed against the minimum wage, the Court calculates Tabti's wages at $7.25 per hour. Id. ¶¶ 10-11; Compl. ¶ 39. The Court therefore recommends that Tabti be awarded $5,220 ($7.25 x 720) in regular pay and $435 (1.5 x $7.25 x 40) in overtime compensation.
Tabti also alleges that he was not paid credit-card tips from customers for his entire employment period. Tabti Decl. ¶¶ 4-5; Pls.' Findings and Conclusions ¶ 37. Based on Tabti's recollection and a review of records, and as memorialized in an email to defendant Bondon dated June 12, 2014, Tabti estimates that he is owed $9,000 in withheld tips for his entire tenure at the restaurant. Tabti Decl. ¶ 5, Ex. B (email dated June 12, 2014). Given the default, the Court accepts this estimate and recommends that Tabti be awarded $9,000 in unpaid tips.
D. Statutory Damages for Wage-Notice and Wage-Statement Violations
1. Applicable Legal Standards
Plaintiffs seek to recover damages for the Defaulting Defendants' failure to provide wage statements and wage notices as required by New York's Wage Theft Prevention Act ("WTPA"). Compl. ¶¶ 66-69; see NYLL § 195. The WTPA requires employers to provide, "with every payment of wages," a statement that lists the following:
the dates of work covered by that payment of wages; name of employee; name of employer; address and phone number of employer; rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or other; gross wages; deductions; allowances, if any, claimed as part of the minimum wage; and net wages. . . . [T]he statement shall include the regular hourly rate or rates of pay; the overtime rate or rates of pay; the number of regular hours worked, and the number of overtime hours worked.NYLL § 195(3). During the relevant period, "[t]he WTPA entitled employees to recover statutory damages for violations of the wage statement requirement of $100 per work week, not to exceed $2,500." Baltierra v. Advantage Pest Control Co., No. 14-CV-5917 (AJP), 2015 WL 5474093, at *10 (S.D.N.Y. Sept. 18, 2015) (citing 2010 N.Y. Laws ch. 564 § 7, amending NYLL § 198(1-d)).
The WTPA also requires that employers furnish each employee with a wage notice at the time of hiring that contains the following information:
the rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or other; allowances, if any, claimed as part of the minimum wage, including tip, meal, or lodging allowances; the regular pay day designated by the employer in accordance with section one hundred ninety-one of this article; the name of the employer; any "doing business as" names used by the employer; the physical address of the employer's main office or principal place of business, and a mailing address if different; the telephone number of the employer; plus such other information as the commissioner deems material and necessary.NYLL § 195(1)(a). At all times relevant here, the WTPA entitled employees to recover, as statutory damages for violations of the wage-notice requirement, $50 per work week, not to exceed $2,500. NYLL § 198(1-b).
"Effective February 27, 2015, N.Y. Lab. Law § 198(1-b) was revised to 'fifty dollars for each work day that the violations occurred or continue to occur, but not to exceed a total of five thousand dollars.'" Zhang v. Red Mountain Noodle House Inc., No. 15-CV-628 (SJ) (RER), 2016 WL 4124304, at *6 n.12 (E.D.N.Y. July 5, 2016), adopted by, 2016 WL 4099090 (E.D.N.Y. Aug. 2, 2016). Like the court in Zhang, however, I will apply this provision as it was at the time the violations took place. Id.
2. Application
a. Schalaudek's Statutory Damages
Schalaudek never received a wage statement with payments of wages for the 26 weeks of his employment or a wage notice upon his hiring or anytime thereafter. Compl. ¶¶ 66-69; Pls.' Findings and Conclusions ¶¶ 43-44, 66-67; Schalaudek Decl. ¶¶ 11-12. The Court concludes that he is therefore entitled to statutory damages under the WTPA in the amount of $3,800—that is, the maximum award of $2,500 for the Defaulting Defendants' failure to comply with the WTPA's wage-statement requirements and $1,300 (26 x $50) for their failure to comply with the WTPA's wage-notice requirements.
Schalaudek would be entitled to $2,600 (26 x $100) in wage-statement damages, but, as explained above, damages are capped at $2,500.
b. Tabti's Statutory Damages
Similarly, Tabti never received a wage statement with any payment of wages for the 20 weeks of his employment, or a wage notice upon his hiring or at any time after that for the 20 weeks of his employment. Compl. ¶¶ 66-69; Pls.' Findings and Conclusions ¶¶ 43-44, 66-67. The Court therefore concludes that he is entitled to statutory damages under the WTPA in the amount of $3,000—that is, $2,000 (20 x $100) for the WTPA's wage-statement violations and $1,000 (20 x $50) for wage-notice violations.
The Court awards Tabti damages for NYLL wage-statement violations, even though he was never paid hourly wages. Under NYLL § 195(3), employers must "furnish each employee with a statement with every payment of wages." Here, although Tabti received "payment of tips on certain nights," it is unclear whether the payment of these tips constitutes a "payment of wages" under NYLL § 195(3). Nevertheless, the statutory language of NYLL § 198(1-d), which governs damages, appears to be broad enough to cover employers who withhold wages from employees for the entire duration of their employment. See NYLL § 198(1-d) (effective Apr. 9, 2011 to Feb. 26, 2015) ("If any employee is not provided a statement or statements as required by subdivision three of section one hundred ninety-five of this article, he or she shall recover in a civil action damages of one hundred dollars for each work week that the violations occurred or continue to occur, but not to exceed a total of twenty-five hundred dollars, together with costs and reasonable attorney's fees.").
E. Liquidated Damages Pursuant to the FLSA and NYLL
1. Applicable Legal Standards
Plaintiffs seek liquidated damages pursuant to both the FLSA and NYLL, arguing FLSA liquidated damages serve a compensatory purpose, while NYLL liquidated damages serve a punitive purpose. Pls.' Findings and Conclusions ¶ 56. Under the FLSA, a plaintiff who demonstrates that he was improperly denied either minimum or overtime wages may recover, in addition to reimbursement of these unpaid wages, an "additional equal amount as liquidated damages." 29 U.S.C. § 216(b). The FLSA, however, permits courts the "discretion to deny liquidated damages where the employer shows that, despite its failure to pay appropriate wages, it acted in subjective 'good faith' with objectively 'reasonable grounds' for believing that its acts or omissions did not violate the FLSA." Barfield v. N.Y.C. Health & Hospitals Corp., 537 F.3d 132, 142 (2d Cir. 2008) (quoting 29 U.S.C. § 260). The Second Circuit has noted that "the employer's burden [is] 'a difficult one,' emphasizing that 'double damages are the norm and single damages the exception.'" Id. (quoting Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132, 142 (2d Cir. 1999)) (internal alterations omitted). In situations where "defendants never made this showing in light of their default, they have not rebutted the presumption in favor of a liquidated damages award." Guaman v. J & C Top Fashion, Inc., No. 14-CV-8143 (GBD) (GWG), 2016 WL 791230, at *7 (S.D.N.Y. Feb. 22, 2016).
NYLL also entitles the employee to liquidated damages "unless the employer proves a good faith basis for believing that its underpayment of wages was in compliance with the law." NYLL § 198(1-a). This good-faith exception, which has been in effect since November 24, 2009, represents a change from the prior standard in which employees were entitled to damages only if they showed that the employer's violation "was willful." Inclan, 95 F. Supp. 3d at 505. "The NYLL was further amended in 2010 to increase the liquidated damages award from 25% to 100% . . . ." Garcia v. JonJon Deli Grocery Corp., No. 13-CV-8835 (AT), 2015 WL 4940107, at *5 (S.D.N.Y. Aug. 11, 2015) (citing Gold v. N.Y. Life Ins. Co., 730 F.3d 137, 143 (2d Cir. 2013)); NYLL §§ 198(1-a), 663(1). The provision of liquidated damages under NYLL is "more generous than its federal counterpart" as it "applies to unpaid regular wages, unlawful withholdings from tips, and unpaid 'spread-of-hours' wages, in addition to unpaid overtime." Gunawan v. Sake Sushi Rest., 897 F. Supp. 2d 76, 91 (E.D.N.Y. 2012) (citing NYLL § 198).
This Court has recently concluded that the FLSA and NYLL standards for liquidated damages "'have now coalesced,'" which makes "arguments about the different purposes of the FLSA and NYLL liquidated damages provisions . . . less compelling." Xochimitl v. Pita Grill of Hell's Kitchen, Inc., No. 14-CV-10234 (JGK) (JLC), 2016 WL 4704917, at *17 (S.D.N.Y. Sept. 8, 2016) (quoting Garcia, 2015 WL 4940107, at *6), adopted by, 2016 WL 6879258 (S.D.N.Y. Nov. 21, 2016). Moreover, in rejecting a request for stacked liquidated damages, the Second Circuit has observed, albeit in a summary order, that the "New York State legislature has now twice amended its liquidated damages statute to conform as closely as possible to the FLSA's liquidated damages provision." Chowdhury v. Hamza Express Food Corp., No. 15-3142-CV, 2016 WL 7131854, at *2 (2d Cir. Dec. 7, 2016). "These amendments suggest 'an interest in aligning NYLL liquidated damages with the FLSA and can be read as a practical recognition of the dual punitive and compensatory effects of an award of liquidated damages under the statute.'" Id. (quoting Xochimitl, 2016 WL 4704917, at *17). "So whatever reasons existed to award liquidated damages under the relevant provisions of both the FLSA and the NYLL before 2010," the coalescing purposes of the laws have "eliminated those reasons." Id. Accordingly, the Court recommends against awarding liquidated damages under both the FLSA and NYLL. The Court will instead calculate plaintiffs' liquidated damages award solely under NYLL as it provides greater relief than the FLSA. See Xochimitl, 2016 WL 4704917, at *17.
2. Application
Given the Defaulting Defendants' failure to rebut plaintiffs' allegations that the NYLL violations were willful, the Court concludes that plaintiffs are entitled to liquidated damages. Id. at *15 ("Courts deem defendants' actions willful where they have defaulted and . . . such defaulting defendants will have obviously made no showing of good faith.") (internal alterations, citations, and quotation marks omitted). Consequently, the Court concludes that plaintiffs are entitled to liquidated damages in the amount of 100 percent of unpaid wages, including overtime wages, and 100 percent of unpaid tips. Specifically, Schalaudek is entitled to liquidated damages in the amount of $8,581.32, which accounts for $1,856 in unpaid minimum wages and $6,725.32 in unpaid tips. Tabti is entitled to liquidated damages in the amount of $14,655, which represents $5,220 in unpaid minimum wages, $435 in unpaid overtime compensation, and $9,000 in unpaid tips.
F. Prejudgment Interest
In addition to liquidated damages, plaintiffs seek prejudgment interest on unpaid wages and tips. Pls.' Findings and Conclusions ¶ 62. "The Second Circuit has held that even where a plaintiff is awarded liquidated damages under the NYLL, prejudgment interest still is appropriate." Andrade, 2016 WL 3141567, at *10 (citing Reilly v. Natwest Markets Grp., Inc., 181 F.3d 253, 265 (2d Cir. 1999); see also Morales v. Mw Bronx, Inc., No. 15-CV-6296 (TPG), 2016 WL 4084159, at *10 (S.D.N.Y. Aug. 1, 2016) ("Interest is not awarded under the FLSA when FLSA liquidated damages are awarded, as interest is assumed to be included under liquidated damages . . . However, prejudgment interest is still appropriate where a plaintiff is awarded liquidated damages under the NYLL."). "Prejudgment interest applies only to the amount of compensatory damages, and excludes the amount of liquidated damages." Maldonado, 2012 WL 1669341, at
State law provides that interest shall be at the rate of nine percent per year. N.Y. C.P.L.R. § 5004. "Where damages are incurred at various times, interest may be computed on all damages from a 'single reasonable intermediate date' between the dates on which the damages were incurred." Humphrey v. RAV Investigative & Sec. Servs. Ltd., No. 12-CV-3581 (NRB), 2016 WL 7190073, at *12 (S.D.N.Y. Nov. 29, 2016) (citing N.Y. C.P.L.R. § 5001). Courts have "wide discretion in determining a reasonable date from which to award pre-judgment interest." Conway v. Icahn & Co., 16 F.3d 504, 512 (2d Cir. 1994)). "'Simple prejudgment interest is calculated by multiplying the principal by the interest rate by the time period—from a singular, midpoint date—up until and including the date judgment is entered.'" Soto v. Armstrong Realty Mgmt. Corp., No. 15-CV-283 (AJN) (JCF), 2016 WL 7396687, at *5 (S.D.N.Y. Dec. 21, 2016) (quoting Maldonado, 2012 WL 1669341, at *11).
For Schalaudek, the Court concludes that the reasonable intermediate date is June 23, 2013—an approximate midpoint between the first time (May 19) and the last time (July 28) that Schalaudek was denied wages and tips. Thus, the Court recommends that Schalaudek receive nine percent interest on a balance of $8,581.32 (representing $1,856 in unpaid minimum wages and $6,725.32 in withheld tips) from June 23, 2013 until the date that judgment is entered. For Tabti, the Court concludes that the reasonable intermediate date is October 1, 2013—an approximate midpoint between mid-July and mid-December 2013. Consequently, Tabti should receive prejudgment interest on a principal of $14,655 (representing $5,220 in unpaid minimum wages, $435 in unpaid overtime compensation, and $9,000 in unpaid tips) from October 1, 2013 until the date on which judgment is entered.
Tabti asserts that he worked without pay for 20 weeks between July and December 2013, but he does not specify the exact dates on which his employment began or ended. Tabti Decl. ¶¶ 2, 4.
Plaintiffs' proposed methodology for calculating liquidated damages understates the amount of prejudgment interest owed. For Schalaudek, plaintiffs appear to request that prejudgment interest be calculated based solely on a portion of his unpaid tips, excluding unpaid wages altogether. Pls.' Findings and Conclusions ¶ 64; Schalaudek Decl. ¶ 6. For Tabti, plaintiffs request that prejudgment interest be calculated based on all unpaid wages and tips, but they calculate wages using $5 per hour instead of $7.25. Pls.' Findings and Conclusions ¶ 65; Tabti Decl. ¶ 6. Under NYLL, however, prejudgment interest is available for unpaid minimum wages and tips. See, e.g., Fermin v. Las Delicias Peruanas Rest., Inc., 93 F. Supp. 3d 19, 49-50 (E.D.N.Y. 2015).
G. Attorney's Fees
Plaintiffs seek attorney's fees for 35.5 hours of work, at an hourly rate of either $225 or $275, for a total award of either $7,987.50 or $9,762.50. Both the FLSA and NYLL are fee-shifting statutes that entitle prevailing plaintiffs to reasonable attorney's fees and costs. 29 U.S.C. § 216(b); NYLL § 198(1-a); see, e.g., Gurung v. Malhotra, 851 F. Supp. 2d 583, 595 (S.D.N.Y. 2012).
Plaintiffs' submissions assert an hourly rate of $275 in some places and $225 in others, and a total award of $9,762.50 in some places and $7,987.50 in others. Compare Pls.' Findings and Conclusions ¶ 71 ($275) and Counsel Decl. Ex. 3 (same) with Counsel Decl. ¶ 7 ($225); compare Pls.' Findings and Conclusions ¶ 73 ($7,987.50), with Counsel Decl. Ex. 3 ($9,762.50).
"[T]o determine the appropriate fee award, courts typically start by determining the so-called lodestar amount, or 'the product of a reasonable hourly rate and the reasonable number of hours required by the case.'" Yuquilema, 2014 WL 4207106, at *14 (citing Millea v. Metro-North R.R., 658 F.3d 154, 166 (2d Cir. 2011)). "[B]oth the [Second Circuit] and the Supreme Court have held that the lodestar . . . creates a presumptively reasonable fee." Gurung, 2012 WL 691532, at *10 (quoting Millea, 658 F.3d at 166) (alteration in original); see also Angamarca, 2012 WL 3578781, at *10.
Plaintiffs must "document the application [for fees and costs] with contemporaneous time records . . . specify[ing], for each attorney, the date, the hours expended, and the nature of the work done." N.Y. State Assn'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1148 (2d Cir. 1983); see also Scott v. City of N.Y., 626 F.3d 130, 132 (2d Cir. 2010). "[T]he 'burden is on the fee applicant to produce satisfactory evidence—in addition to the attorneys' own affidavits—that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." Angamarca, 2012 WL 3578781, at *11 (quoting Blum v. Stenson, 465 U.S. 886, 896 n.11 (1984)). District courts have "'considerable discretion in determining what constitutes reasonable attorney's fees in a given case.'" Matusick v. Erie Cnty. Water Auth., 757 F.3d 31, 64 (2d Cir. 2014) (quoting Barfield, 537 F.3d at 151).
1. Reasonable Hourly Rate
"'The reasonable hourly rate is the rate a paying client would be willing to pay,' bearing in mind that a 'reasonable, paying client wishes to spend the minimum necessary to litigate the case effectively.'" Yuquilema, 2014 WL 4207106, at *13 (quoting Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cnty. of Albany, 522 F.3d 182, 190 (2d Cir. 2008)). "To assess the reasonable rate, the Court considers the prevailing market rates 'for similar services by lawyers of reasonably comparable skill, experience and reputation.'" See Maldonado, 2012 WL 1669341, at *12 (quoting Gierlinger v. Gleason, 160 F.3d 858, 882 (2d Cir. 1998)). To make this determination, a court may "rely on its own knowledge of local, comparable rates." Yuquilema, 2014 WL 4207106, at *13 (citing Adorno v. Port Auth. of N.Y. & N.J., 685 F. Supp. 2d 507, 511 (S.D.N.Y. 2010)).
In the wage-and-hour context, courts in this District have generally reserved "rates in excess of $225.00 per hour . . . for FLSA litigators with more than three years' experience." Gonzalez v. Scalinatella, Inc., 112 F. Supp. 3d 5, 28 (S.D.N.Y. 2015) (collecting cases); see also Siegel v. Bloomberg L.P., No. 13-CV-1351 (DF), 2016 WL 1211849, at *6 (S.D.N.Y. Mar. 22, 2016) ("associates with at least four years of experience . . . are typically awarded fees of about $200 to $275 per hour"). Counsel with less experience are typically awarded lower hourly rates. See, e.g., Penafiel v. Rincon Ecuatoriano, Inc., No. 15-CV-112 (PAE), 2015 WL 7736551, at *3 (S.D.N.Y. Nov. 30, 2015) (finding "appropriate rate for inexperienced associates [to be] $175 per hour" in FLSA case). "While it is true that courts . . . deciding reasonable fees can and should take into consideration many aspects of an attorney's practice to ensure a reasonable hourly rate, . . . it is long established that 'courts should not automatically reduce the reasonable hourly rate based solely on an attorney's status as a solo practitioner.'" Porzig v. Dresdner, Kleinwort, Benson, N. Am. LLC, 497 F.3d 133, 143 (2d Cir. 2007) (quoting McDonald ex rel Prendergast v. Pension Plan of the NYSA-ILA Pension Trust Fund, 450 F.3d 91, 98 n.6 (2d Cir. 2006)); see also Saldana v. New Start Grp., Inc., No. 14-CV-4049 (CBA) (RLM), 2016 WL 3683530, at *3 (E.D.N.Y. July 6, 2016) ("Although the attorneys in this case are solo practitioners, rather than partners or associates at a law firm, the Second Circuit has cautioned district courts against 'treat[ing] an attorney's status as a solo practitioner as grounds for an automatic reduction in the reasonable hourly rate,' and has instead urged the courts to compare solo practitioners to attorneys of comparable skill, expertise, and reputation.") (quoting McDonald, 450 F.3d at 98 n.6) (alterations in original).
"[C]ourts are generally more skeptical of requested hourly rates when the applicant fails to provide information about the backgrounds of the relevant attorneys and paralegals." Gonzalez, 112 F. Supp. 3d at 28. In "determining the reasonableness of the requested attorneys' fees, the Court considers the quality of the work done by the attorneys." Harris v. Fairweather, No. 11-CV-2152 (PKC) (AJP), 2012 WL 3956801, at *8 (S.D.N.Y. Sept. 10, 2012) (reducing fee award where "documents that counsel submitted in connection with the inquest were mediocre, included numerous errors, and failed to cite to authority for much of the relief requested"), adopted by, 2012 WL 5199250 (S.D.N.Y. Oct. 19, 2012); Poparic v. European Music & Video Store, No. 08-CV-2081, 2009 WL 6318212 at *9 (E.D.N.Y. Dec. 16, 2009) ("[W]hile attorneys with similar numbers of years experience . . . may occasionally garner higher fees, the sub-par quality of the legal work in this case warrants a lower hourly rate.").
Here, plaintiffs' counsel is David Pernas, Esq., a solo practitioner and 2011 law-school graduate who was admitted to practice in 2012 and who has "roughly two years of commercial litigation experience." Counsel Decl. ¶¶ 5-6. Pernas does not further describe his background, or indicate whether he has had any prior experience in employment or wage-and-hour matters. In support of his requested hourly rate, Pernas cites an order deciding a fee application in a copyright case that he did not litigate. Counsel Decl. ¶ 7 (citing Pyatt v. Raymond, No. 10-CV-8764 (CM), 2012 WL 1668248, at *1 (S.D.N.Y. May 10, 2012)). Given counsel's lack of experience (and his failure to describe his experience), as well as numerous errors in his inquest submissions, the Court recommends that his hourly rate be reduced to $200 per hour.
2. Reasonable Hours Expended
"After determining the appropriate hourly billing rate, the court calculates the hours reasonably expended." Maldonado, 2012 WL 1669341, at *13 (internal quotation marks omitted). In determining the reasonable number of hours required by a case, courts consider "whether, at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures." Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992). Courts must make "a conscientious and detailed inquiry into the validity of the representations that a certain number of hours were usefully and reasonably expended." Lunday v. City of Albany, 42 F.3d 131, 134 (2d Cir. 1994). "If the Court finds that some of the claimed hours are 'excessive, redundant or otherwise unnecessary,' it may reduce the number of reasonable hours accordingly." Bumble & Bumble, LLC v. Pro's Choice Beauty Care, Inc., No. 14-CV-6911(VEC) (JLC), 2016 WL 658310, at *9 (S.D.N.Y. Feb. 17, 2016) (quoting Hensley v. Eckhart, 461 U.S. 424, 434 (1983)), adopted by, 2016 WL 1717215 (S.D.N.Y. Apr. 27, 2016).
This Court and others in this District have repeatedly reduced or excluded hours concerning matters unrelated, or not exclusively related, to defaulting defendants. See, e.g., Xochimitl, 2016 WL 4704917, at *21-22 (reducing by 20 percent hours that counsel spent on matters that related to both defaulting and non-defaulting defendants and excluding altogether hours dedicated to matters exclusively related to non-defaulting defendants) (collecting cases). Plaintiffs have provided the Court with their billing records, which include hours expended, dates of work, and brief descriptions of the tasks performed. Counsel Decl., Ex. 3. Counsel billed 2.75 hours on matters that appear to be related exclusively to non-defaulting defendants Derek and Daniel Koch. Counsel Decl. Ex. 3 (entries for 5/23/16, 6/12/16, 6/20/16). The Court declines to award Pernas fees for these hours. Pernas also bills 13 hours for work performed on matters that related to both the Defaulting Defendants and defendants who are not in default. Counsel Decl. Ex. 3 (entries for 8/2/15, 12/15/15, 12/28/15, 2/25/16). The Court reduces these 13 hours by 20 percent to 10.4 hours. See, e.g., Xochimitl, 2016 WL 4704917, at *21-22. The remaining 19.75 hours relate exclusively to matters concerning the Defaulting Defendants, and the Court awards counsel the full amount for these hours. See, e.g., 6D Global Tech., Inc. v. Bei Lu, 15-CV-1120, 2016 WL 1756920, at *3 (S.D.N.Y. 2016) (28.5 hours spent on default judgment reasonable).
Thus, the Court recommends that counsel be compensated for a total of 30.15 hours (10.4 + 19.75) at $200 per hour for a total award of $6,030 in fees. Consistent with plaintiffs' request that the fee award be divided in half between them, the Court recommends that each plaintiff receive $3,015 in fees in the final judgment. See, e.g., Cesario v. BNI Constr., Inc., No. 07-CV-8545 (LLS) (GWG), 2008 WL 5210209, at *10 (S.D.N.Y. Dec. 15, 2008) ("Each plaintiff should be awarded half of [the total award for fees and costs] in the final judgment."), adopted by, 2009 WL 424136 (S.D.N.Y. Feb. 19, 2009).
H. Costs
Plaintiffs also seek $700 in costs resulting from the $400 filing fee and $300 in fees to effect service on each of the Defaulting Defendants. Counsel Decl. ¶ 9. "An employee who prevails in a wage-and-hour action is entitled to recover costs." Xochimitl, 2016 WL 4704917, at *22 (citing 29 U.S.C. § 216(b); NYLL § 663(1)). "Costs are defined as 'those reasonable out-of-pocket expenses incurred by attorneys and ordinarily charged to their clients.'" Id. (quoting Leblanc-Sternberg v. Fletcher, 143 F.3d 748, 763 (2d Cir. 1998)). The Court recommends that plaintiffs be reimbursed for $700 in costs, and that each plaintiff receive $350 in costs in the final judgment.
III. CONCLUSION
For the reasons set forth above, I recommend that plaintiff Schalaudek be awarded damages against the Defaulting Defendants in the amount of $1,856 in unpaid minimum wages; $6,725.32 in withheld tips; $3,800 in statutory damages for NYLL wage-statement and wage-notice violations; $8,581.32 in liquidated damages under NYLL only; and $3,365 in attorney's fees and costs, for a total amount of $24,327.64, plus prejudgment interest as set out in section II(F) above. I recommend that Tabti be awarded $5,220 in unpaid minimum wages; $435 in unpaid overtime compensation; $9,000 in unpaid tips; $3,000 in statutory damages for NYLL wage-statement and wage-notice violations; $14,655 in liquidated damages under NYLL only; and $3,365 in attorney's fees and costs, for a total amount of $35,675, plus prejudgment interest as set out in section II(F) above.
PROCEDURE FOR FILING OBJECTIONS TO THIS
REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from service of this Report to file written objections. See also Fed. R. Civ. P. 6. Such objections, and any responses to objections, shall be filed with the Clerk of Court, with courtesy copies delivered to the chambers of the Honorable William H. Pauley, III and the undersigned, United States Courthouse, 500 Pearl Street, New York, New York 10007. Any requests for an extension of time for filing objections must be directed to Judge Pauley. FAILURE TO FILE OBJECTIONS WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. 28 U.S.C. § 636(b)(1); FED. R. CIV. P. 72. See Thomas v. Arn, 474 U.S. 140 (1985); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010). Dated: New York, New York
February 24, 2017
/s/_________
JAMES L. COTT
United States Magistrate Judge