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Jimenez v. KLB Foods, Inc.

United States District Court, S.D. New York

June 17, 2014

JOSE URBANO JIMENEZ and VICENTE CARRASCO, on behalf of themselves, FLSA Collective Plaintiffs and the Class, Plaintiffs,


J. PAUL OETKEN, District Judge.

Plaintiffs Jose Urbano Jimenez and Vicente Carrasco claim that their employer, Defendant KLB Foods, Inc., failed to pay them minimum and overtime wages, in violation of the Fair Labor Standards Act and New York Labor Law. Defendants KLB Foods and Kunwar Bist have filed a motion for judgment on the pleadings.[1] Plaintiffs, in response, have filed a motion for sanctions. Defendants' reply included a cross-motion for sanctions. For the reasons that follow, all three motions are denied.

I. Background

This section summarizes Plaintiffs' allegations, which the Court accepts as true for purposes of this motion.

KLB Foods operates a restaurant called Andaz. Defendant Kunwar Bist hired Plaintiff Jose Urbano Jimenez in August 2011 to work for Andaz as a delivery person. Urbano Jimenez worked a six-and-one-half hour shift seven days a week. In January 2012, Bist hired Plaintiff Vicente Carrasco to work as a delivery person on the same schedule. Bist treated Urbano Jimenez and Carrasco as tipped employees and set their rate of pay at $105 a week. But neither Bist nor any other KLB Foods employee gave the named Plaintiffs written notice of their rate of hourly pay, their rate of overtime pay, or the fact that KLB Foods was taking a tip credit against its minimum wage obligation. Moreover, Plaintiffs spent more than 20% of their working time completing duties such as cooking food, packing food, and cleaning the restaurant-all activities that are not tip-related. And nobody at KLB Foods recorded the amount of tips Plaintiffs earned or provided Plaintiffs with an itemized wage statement. Nevertheless, KLB Foods paid Plaintiffs the tip credit minimum wage, even when Plainitffs worked overtime.

II. Discussion

A. Motion for Judgment on the Pleadings

1. Legal Standard

A motion for judgment on the pleadings is subject to the same standard as a motion to dismiss. See Pensionsversicherungsanstalt v. Greenblatt, __ Fed.App'x __, 2014 WL 700731, *1-*2 (2d Cir. Feb. 25, 2014). Both motions challenge whether a complaint satisfies the general pleading standard, Rule 8(a) of the Federal Rules of Civil Procedure, which requires a complaint to make a short, plain statement of a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). To determine whether a complaint satisfies Rule 8, a court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in the plaintiff's favor. Id. But the court need not accept "[t]hreadbare recitals of the elements of a cause of action, " which are essentially legal conclusions. Id. at 678 (citing Twombly, 550 U.S. at 555). After separating legal conclusions from well-pleaded factual allegations, the court must determine whether those facts make it plausible-not merely possible-that the defendants acted unlawfully. Id.

2. Employer-Employee Relationship

Defendants' first argument is that Plaintiffs have not adequately alleged that they were employees covered by the Fair Labor Standards Act. FLSA applies only to employees, not to independent contractors. To determine whether a plaintiff is an employee for FLSA purposes, courts examine the "economic reality" of a working relationship. Irizarry v. Catsimatidis, 722 F.3d 99, 104-05 (2d Cir. 2013) (citing Barfield v. N.Y. City Health & Hosps. Corp., 537 F.3d 132, 134 (2d Cir. 2008)). The inquiry is a totality-of-the-circumstances approach, so no one factor is dispositive, but courts consider at least "(1) the degree of control exercised by the employer over the workers, (2) the workers' opportunity for profit or loss and their investment in the business, (3) the degree of skill and independent initiative required to perform the work, (4) the permanence or duration of the working relationship, and (5) the extent to which the work is an integral part of the employer's business." Brock v. Superior Care, Inc., 840 F.2d 1054, 1058-59 (2d Cir. 1988) (citations omitted). Courts are also permitted to consider any other factor relevant to the economic reality of the working relationship. Id. at 1059 (citing Rutherford Food Corp. v. McComb, 331 U.S. 722, 730 (1947)). "The ultimate concern is whether, as a matter of economic reality, the workers depend upon someone else's business for the opportunity to render service or are in business for themselves." Id. at 1059 (citing Donovan v. Tehco, Inc., 642 F.2d 141, 143 (5th Cir. 1981)).

In this case, Plaintiffs' allegations are sufficient to state a plausible claim that Plaintiffs were employees. Bist exercised a fair degree of control over Plaintiffs: he set specific work schedules for them, from 4:30 p.m. to 10:00 p.m., seven days a week. Plaintiffs were also required to cook, clean, and prepare food when they were not making deliveries, which suggests that they were not merely in business for themselves as delivery persons. Bist determined how much Plaintiffs would be paid per hour and how they received their paychecks. There is no allegation that Plaintiffs had any investment in Andaz or opportunity for profit outside their hourly wage and tips. And there is no allegation that the type of deliveries Plaintiffs were making required any special skill. Plaintiffs were not hired to complete a discrete project; rather, they were permanent workers who worked on a daily basis beginning in August 2011 and January 2012. Finally, the function of cooking, packaging, and delivering food is an integral part of the business of a restaurant. In light of all of these factors, Plaintiffs have stated a plausible claim that they were employees for the purposes of FLSA.

3. Other Elements of Minimum Wage and Overtime Claims

Defendants' second ground for dismissal is that the complaint "miserably fails to demonstrate any claim in any manner whatsoever" and that "[t]he legal theory advanced by plaintiff[s] is not a cognizable ...

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