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Colon v. Major Perry Street Corp.

United States District Court, S.D. New York

December 19, 2013

RUDY COLON, individually and on behalf of others similarly situated, Plaintiffs,
MAJOR PERRY STREET CORP., et al., Defendants

For Rudy Colon, Individually and on behalf of others similarly situated, Plaintiff: Liane Fisher, LEAD ATTORNEY, Michael Taubenfeld, Serrins Fisher LLP, New York, NY.

For Gabriel Ortiz, Samirka Balic, Alen Balic, Plaintiffs: Liane Fisher, LEAD ATTORNEY, Serrins Fisher LLP, New York, NY.

For Major Perry Street Corp., Major 10th Street Realty Corp., M& E E 52 Barrow LLC, M& E Christopher LLC, Croman Real Estate, Inc., Croman Family Associates, LLC, Yesenia Camilo, Steven Croman, Defendants: Sharon M. Sash, LEAD ATTORNEY, John Mark Lane, Koo, Larrabee, Lau-Kee & Lane, L.L.P, White Plains, NY.


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J. PAUL OETKEN, United States District Judge.

Plaintiff Rudy Colon, individually and on behalf of others similarly situated, alleges that Defendants violated the Fair Labor Standards Act (" FLSA" ) and New York Labor Law (" NYLL" ) by, among other things, failing to pay employees in accordance with minimum wage and overtime laws. On July 2, 2013, the Court granted in part Plaintiffs' Motion for Conditional Certification of a Collective Action under FLSA and ordered the parties to submit a revised Notice of Pendency.[1] (Dkt. No. 31.)

Plaintiffs believe that some potential members of the FLSA collective action may be undocumented workers. While the parties were drafting a Notice of Pendency, the Second Circuit issued a decision limiting the discretion of the National Labor Relations Board (" NLRB" or " Board" ) to award certain damages to undocumented workers under a different law: the

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National Labor Relations Act (" NLRA" ). Palma v. N.L.R.B., 723 F.3d 176 (2d Cir. July 10, 2013). The parties disagree about Palma 's impact on FLSA cases. The underlying question of whether undocumented workers may recover damages under FLSA controls two disputed issues in this case: first, what language, if any, should the Notice of Pendency contain about the participation of undocumented workers; and second, what discovery, if any, should be allowed into the citizenship status of potential plaintiffs.

For the reasons that follow, this Court holds that undocumented workers continue to be eligible to recover unpaid minimum wage and overtime wages under FLSA. Accordingly, the Court approves a Notice of Pendency including Plaintiffs' latest proposed language,[2] and denies Defendants' Motion for Discovery Regarding Immigration Status.

I. Discussion

This is a tale of two labor laws and the divergent paths that they have taken in light of shifting immigration policy. In FLSA actions, such as this case, the courts have traditionally permitted undocumented workers to recover unpaid minimum wage and overtime pay for work that has already been performed (" retrospective backpay" ). In contrast, in NLRA actions the courts have not permitted undocumented workers to recover post-termination backpay for work that was not actually performed, but that would have been performed but for an employer action--such as retaliatory termination of an employee--that violated statutorily prescribed labor rights. The two statutes provide distinctive rights and remedies. Despite employers' repeated attempts to import the NLRA's limitations into FLSA cases, courts have consistently and overwhelmingly distinguished NLRA precedents from FLSA doctrine. Defendants now argue that Palma, the Second Circuit's latest NLRA decision, represents a " sea change" in the established practice. (Dkt. No. 36 at 2.)

A. The Fair Labor Standards Act

Defendants' position is first considered in light of the text, legislative history, and agency interpretation of FLSA.

1. Statutory Text

In evaluating the proper scope of FLSA's protections, the plain text of the statute is a critical starting point. The statute provides, without exception, that " [a]ny employer who violates the [minimum wage or overtime] provisions . . . shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation . . . and in an additional equal amount as liquidated damages." 29 U.S.C. § 216(b); see also Patel v. Quality Inn S., 846 F.2d 700, 705 (11th Cir. 1988) (quoting § 216(b) to argue that " [n]othing in the act purports to limit the remedy available to any of the workers it covers" ).

The term " employee" is broadly defined as " any individual employed by an employer." 29 U.S.C. § 203(e)(1). FLSA provides several exceptions to this definition, but undocumented workers are not among the exceptions. Given FLSA's broad definition and express exceptions, the Supreme Court has articulated skepticism toward finding additional exceptions by implication:

The Act declared its purposes in bold and sweeping terms. Breadth of coverage was vital to its mission. Its scope was stated in terms of substantial universality . . . . Where exceptions were

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made, they were narrow and specific. It included as employees 'any individual employed by an employer' . . . . It devoted § 13 to listing exemptions of specific classes of employees . . . . Such specificity in stating exemptions strengthens the implication that employees not thus exempted . . . remain within the Act.

Powell v. U.S. Cartridge Co., 339 U.S. 497, 516-17, 70 S.Ct. 755, 94 L.Ed. 1017 (1950) (internal citations omitted); see also Citicorp Indus. Credit, Inc. v. Brock, 483 U.S. 27, 27-28, 107 S.Ct. 2694, 97 L.Ed.2d 23 (1987) (" Detailed and particular FLSA exemptions cannot be enlarged by implication . . . ." ); Patel, 846 F.2d at 702-03 (citing additional Supreme Court precedents). Contemporary courts, including those ruling after Palma, have continued to conclude that " FLSA's sweeping definitions of 'employer' and 'employee' unambiguously encompass unauthorized aliens." Lucas v. Jerusalem Cafe, LLC, 721 F.3d 927, 934 (8th Cir. July 29, 2013).

This plain reading of FLSA is supported when FLSA is read in pari materia with the Immigration Reform and Control Act of 1986 (IRCA), Pub. L. No. 99-603, 100 Stat. 3359. IRCA does not textually repeal FLSA's protection of undocumented workers but rather presumes that FLSA will apply to such workers. " In section 111(d) [of IRCA] Congress specifically authorized the appropriation of additional funds for increased FLSA enforcement on behalf of undocumented aliens. . . . This provision would make little sense if Congress had intended the IRCA to repeal the FLSA's coverage of undocumented aliens." [3] Patel, 846 F.2d at 704. " Presuming . . . that the IRCA impliedly exempts unauthorized aliens from the protections of the FLSA would render this section 'mere surplusage.' . . . A reading [of FLSA] that turns an entire subsection [of IRCA] into a meaningless aside 'is inadmissible, unless the words require it.'" Lucas, 721 F.3d at 937 (citing Marbury v. Madison, 5 U.S. (1 Cranch) 137, 174, 2 L.Ed. 60 (1803)).

2. Legislative History

The legislative history of both FLSA and IRCA support the plain reading that FLSA encompasses undocumented workers. FLSA was part of social legislation " [p]assed in the depths of the Great Depression . . . to ensure a 'fair day's pay for a fair day's work.'" Stein v. Guardsmark, LLC, 12 Civ. 4739 (JPO), 2013 WL 3809463 at *1 (S.D.N.Y. July 23, 2013) (citing S. Rep. No. 884-2475 at 2 (1937); 81 Cong. Rec. 4983 (1937)). " It requires covered employers to pay their employees a statutorily prescribed minimum wage and prohibits employers from requiring their employees to work more than forty hours per week unless the employees are compensated at one and one half times their regular hourly rate." Patel, 846 F.2d at 702 (citing 29 U.S.C. § § 206, 207(a)(1)). One court cited Senator Black's statement during floor debates that FLSA's " definition of employee . . . is the broadest definition that has ever been included in any one act." Id. at 702 (citing 81 Cong. Rec. 7656-57 (1937)).

Additionally, " IRCA's legislative history strongly suggests that Congress believed that undocumented aliens would continue to be protected by the FLSA." Id. at 704.

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The House Education and Labor Committee reported that:

[T]he committee does not intend that any provision of this Act would limit the powers of State or Federal labor standards agencies such as the . . . Wage and Hour Division of the Department of Labor . . . to remedy unfair practices committed against undocumented employees . . . . To do otherwise would be counter-productive of our intent to limit the hiring of undocumented employees and the depressing effect on working conditions caused by their employment.

H.R. Rep. No. 99-682(II), at 8-9 (1986); see also H.R. Rep. No. 99-682(I) (1986), at 58 (" It is not the intention of the Committee that the employer sanctions provisions of the bill be used to undermine or diminish in any way labor protections in existing law . . . ." ). The Eighth Circuit cited this Report in a post- Palma decision noting that " [w]hen Congress passed the IRCA, at least the authors of this report expected the FLSA would continue to protect unauthorized aliens from substandard working conditions and wages." Lucas, 721 F.3d at 937. Thus, the legislative histories of both FLSA and IRCA support the textual interpretation described above.

3. Agency Interpretation

The DOL, the agency charged with interpreting and implementing FLSA, has understood FLSA to apply to undocumented workers. See Lucas, 721 F.3d at 935-36 (" The Department of Labor's position that the FLSA applies to aliens without employment authorization is longstanding and consistent." ). " To the extent there is any statutory ambiguity" regarding FLSA's coverage, the DOL's " position is persuasive and merits Skidmore deference." [4] Id. at 936; see also Patel, 846 F.2d at 703 (" As the agency charged with implementing the act, however, the Department's interpretation is entitled to considerable deference." ). The DOL first applied FLSA to " alien" workers in 1942, just four years after the act was passed. Patel, 846 F.2d at 703 (" [DOL] opined that alien prisoners of war were covered by [FLSA] and therefore were entitled to be paid the minimum wage." ) For the last sixty years, the DOL has consistently taken the position that FLSA coverage extends to undocumented workers.

In the Secretary [of Labor]'s amicus brief . . . the Secretary explains that applying the FLSA to unauthorized aliens is essential to achieving the purposes of the FLSA to protect workers from substandard working conditions, to reduce unfair competition for law-abiding employers, and to spread work and ...

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