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Zheng v. Liberty Apparel Co.

August 10, 2010

LING NAN ZHENG, REN ZHU YANG, YUN ZHEN HUANG, WEN QIN LIN, SAI BING WANG, YE BIAO YANG, RONG YUN ZHENG, HUI FANG LIN, XIU YING ZHENG, JIN PING LIN, HUI MING DONG, YU BING LUO, SAU CHI KWOK, SAI XIAN TANG, YI ZHEN LIN, RUI FANG ZHANG, MEI JUAN YU, MEI YING LI, QIN FANG QIU, YI MEI LIN, MEI ZHU DONG, FUNG LAM, XIU ZHU YE, SING KEI LAM, XUE JIN LIN, PLAINTIFFS-APPELLEES,
CUI ZHEN LIN, PLAINTIFF,
v.
LIBERTY APPAREL COMPANY, INC., ALBERT NIGRI, HAGAI LANIADO, DEFENDANTS-CROSS-CLAIMANTS -APPELLANTS,
NGON FONG YUEN, 88 FASHION INC., TOP FIVE SPORTSWEAR, INC., S.P.R. SPORTSWEAR, INC., 91 FASHION INC., DEFENDANTS,
LAI HUEN YAM, ALSO KNOWN AS STEVEN YAM, 998 FASHIONS INC., 103 FASHION INC., DEFENDANTS-CROSS-DEFENDANTS.



SYLLABUS BY THE COURT

Appeal from a judgment entered in the United States District Court for the Southern District of New York (Sullivan, J.), after a jury verdict finding that appellants acted as a joint employer of the plaintiff garment workers, and are liable for unpaid and underpaid wages pursuant to the Fair Labor Standards Act, New York state analogs, and New York Labor Law § 345-a(1). We affirm. We consider the defendants' remaining arguments in a summary order filed contemporaneously with this opinion.

Per curiam.

Argued: July 15, 2010

Before: JACOBS, Chief Judge, PARKER and HALL, Circuit Judges.

Plaintiffs-appellees are 25 Chinese garment workers living and working in New York City's Chinatown. In 1999, they sued Liberty Apparel Company and its principals Albert Nigri and Hagai Laniado (collectively, "the Liberty Defendants"), and others, for violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., New York state analogs, see N.Y. Labor Law § 652(1); N.Y. Comp. Codes R. & Regs. tit. 12, § 142-2.2, and New York Labor Law § 345-a(1). After a lengthy procedural history, the case went to a jury trial, and the principal issue was whether the Liberty Defendants were plaintiffs' "joint employer" for purposes of the FLSA and New York state analogs. The jury returned a verdict in favor of plaintiffs, and following resolution of various post-trial motions, the United States District Court for the Southern District of New York (Sullivan, J.) entered judgment accordingly.

The Liberty Defendants appeal that judgment. In this opinion, we consider their contention that the district court--rather than the jury--should have determined whether the Liberty Defendants were plaintiffs' joint employer. And on that issue, we affirm. We consider the Liberty Defendants' remaining arguments in a summary order filed contemporaneously with this opinion.

I.

The full factual background of this case is set forth in Judge Casey's opinion in Zheng v. Liberty Apparel Co., No. 99-Civ-9033, 2002 WL 398663, at *1-2 (S.D.N.Y. Mar. 13, 2002) ("Zheng I"). We recount only those facts necessary to resolve the single legal issue that requires an opinion.

Plaintiffs' direct employer was Lai Huen Yam, who owned and operated a factory where plaintiffs worked in New York City's Chinatown. In 1997, Yam entered into a business relationship with the Liberty Defendants. Liberty would deliver partially-finished clothes to Yam's factory, and plaintiffs would finish the clothes by sewing the fabrics together and adding buttons, labels, cuffs, and hems. The Liberty Defendants would regularly send quality control representatives to the Factory to supervise plaintiffs' work.

The dealings between Yam and the Liberty Defendants were non-exclusive; Yam's employees (including plaintiffs) did work for other manufacturers, and the Liberty Defendants subcontracted work to approximately 30-40 other factories. Nonetheless, plaintiffs testified that approximately 70 to 80 percent of their work was done on Liberty garments. The Liberty Defendants paid Yam by the piece (not the hour), and Yam paid plaintiffs the same way.

On average, each plaintiff worked more than 85 hours per week. When they were paid for their work--which was not always--they were paid at a rate below the federal and state minimums, and they were never paid overtime.

On August 19, 1999, plaintiffs sued Yam and the Liberty Defendants for violations of the minimum wage and overtime provisions of the FLSA and New York state analogs; they also brought a claim pursuant to New York Labor Law § 345-a(1). Plaintiffs later voluntarily dismissed their claims against Yam, either because he could not be located or had ceased doing business.

The parties cross-moved for summary judgment, and by opinion and order dated March 13, 2002, the court granted the Liberty Defendants' motion in part and denied plaintiffs' motion in full. Zheng I, 2002 WL 398663, at *1. Applying the four-factor joint employment test articulated in Carter v. Dutchess Community College, 735 F.2d 8, 12 (2d Cir. 1984), the court held that the Liberty Defendants were not plaintiffs' joint employer within the meaning of the FLSA and analogous New York state laws. Zheng I, 2002 WL 398663, at *7.

Plaintiffs appealed, and this Court vacated and remanded on the ground that the district court applied the wrong test for determining joint employment. Zheng v. Liberty Apparel Co., 355 F.3d 61, 64 (2d Cir. 2003) ("Zheng II"). Extrapolating from Second Circuit and Supreme Court precedent, Zheng II identified six specific ...


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