United States District Court, S.D. New York
OPINION AND ORDER
J. PAUL OETKEN, District Judge.
Plaintiff Theresa Tackie alleges that Defendants failed to pay her minimum and overtime wages for over a year of work, violating both the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). Tackie has served all Defendants except Ricky Schiffer; Defendants have not answered the complaint or otherwise appeared in this action. Tackie now moves for default judgment in the amount of $54, 044.61, plus 9% prejudgment interest on $13, 205.00 worth of back pay. For the reasons that follow, her motion is granted in part.
Tackie alleges that she worked as a seamstress in Defendants' knitting factory between December 3, 2012 and December 11, 2013. The knitting factory was under the common control of each of the Defendants, including Keff Enterprises LLC and Keff NYC, Inc. Leonard Keff actively managed the factory and had the authority to hire and fire workers. During the year that Tackie worked for the knitting factory, the factory produced garments and had annual gross revenues of more than $500, 000.
Tackie was hired to work for twenty dollars an hour. Tackie occasionally worked 52-hour workweeks, but she was generally scheduled to work from 9:00 a.m. to 5:30 p.m., with a half-hour lunch break, Monday through Friday. Defendants did not post minimum or overtime wage notices in the factory, and they did not pay Tackie for the majority of hours that she worked. Although Defendants did not keep any records of the hours Tackie worked or the wages she received, Tackie kept records indicating that she worked 1, 182.25 hours and she was paid for only 449. Defendants frequently failed to pay her on her regular payment date, and they never paid her overtime wages for weeks in which she worked more than 40 hours.
A. Standard of Review
Because Defendants have failed to answer the complaint, they have conceded Tackie's well-pleaded allegations of liability. Fed.R.Civ.P. 8(b)(6); S.E.C. v. Razmilovic, 738 F.3d 14, 19 (2d Cir. 2013). But because a party in default does not admit conclusions of law, the Court must determine whether those allegations establish a sound legal basis for liability. Jemine v. Dennis, 901 F.Supp.2d 365, 373 (E.D.N.Y. 2012) (citing Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981)). Moreover, to secure a default judgment for damages, the plaintiff must produce evidence sufficient to establish her damages with "reasonable certainty." Cement & Concrete Workers Dist. Council Welfare Fund v. Metro Found. Contractors, Inc., 699 F.3d 230, 235 (2d Cir. 2012) [hereinafter Cement & Concrete Workers ] (citing Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999)). District courts have "much discretion" to determine whether to hold an inquest on damages; an inquest is not mandatory, and a plaintiff's damages may be established by "detailed affidavits and documentary evidence." Id. at 234 (quoting Tamarin v. Adam Caterers, Inc., 13 F.3d 51, 54 (2d Cir. 1993)).
B. Allegations in Support of Liability
To state a FLSA minimum wage claim, a plaintiff must allege that she was the defendant's employee, that her work involved interstate activity, and that she worked hours for which she did not receive minimum and/or overtime wages. Zhong v. August August Corp., 498 F.Supp.2d 625, 628 (S.D.N.Y. 2007); see also Lundy v. Catholic Health Sys. of Long Island, Inc., 711 F.3d 106, 114 (2d Cir. 2013) ("[T]o survive a motion to dismiss [a FLSA overtime claim], Plaintiffs must allege sufficient factual matter to state a plausible claim that they worked compensable overtime in a workweek longer than 40 hours.").
First, 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)). With regard to covered employers, FLSA does not define the "employers" to whom it applies. Irizarry, 722 F.3d at 103-04 (citing Rutherford Food Corp., 331 U.S. at 728). FLSA's definition of "employ, " which "includes to suffer or permit to work, " is so broad that courts read "employer" to mean something broader than a master under traditional agency law principles. See id. at 103. As is the case with the definition of "employee, " courts consider the economic reality of a working relationship to determine whether an individual qualifies as an "employer." Id. at 104 (citing Carter v. Dutchess Cmty. Coll., 735 F.2d 8 (2d Cir. 1984)). The Second Circuit has established four factors that 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. (quoting Carter, 735 F.2d at 12).
Tackie's allegations are sufficient to state a plausible claim that her employment relationship with Defendants was covered by FLSA. Defendants exercised a fair degree of control over Tackie: they set a specific work schedules for her, generally from 9:00 a.m. to 5:30 p.m., five days a week. Leonard Keff determined how much Tackie would be paid per hour and had the authority to hire and fire her. There is no indication that Tackie had any investment in the knitting factory or opportunity for profit outside her hourly wage. And there is no allegation that Tackie's work required any special skill. Tackie was not hired to complete a discrete project; rather, she was a permanent employee who worked on a weekly basis for a year. Finally, a seamstress's work is integral to the operation of a knitting factory. In light of all of these factors, Tackie has stated a plausible claim that her relationship with Defendants was an employment relationship covered by FLSA.
Second, an employee is covered by FLSA if she is "employed in an enterprise engaged in... the production of goods for commerce." 29 U.S.C. §§ 206, 207(a)(1). "Commerce" is... the production of goods for commerce." 29 U.S.C. §§ 206, 207(a)(1). "Commerce" is defined as "commerce... between any State and any place outside thereof." 29 U.S.C. § 203(b). Tackie has alleged that the knitting factory produced garments, which are goods produced in commerce for purposes of FLSA. Yu Y. Ho v. Sim Enters., Inc., 2014 WL 1998237, *10 (S.D.N.Y. May 14, 2014) (citing 29 C.F.R. § 776.20(b)-(c)). Therefore, her work for the factory is covered by FLSA.
Third, Tackie must allege that she did not receive minimum and overtime wages. To state a FLSA minimum wage claim, it is sufficient for a plaintiff to allege facts about her salary and working hours, such that a simple arithmetical calculation can be used to determine the amount owed per pay period. Zhong, 498 F.Supp.2d at 629. Likewise, to state a FLSA overtime claim, a plaintiff must allege only that she worked compensable overtime in a workweek longer than forty hours, and that she was not properly compensated for that overtime. Nakahata v. N.Y.-Presbyterian Healthcare Sys., Inc., 723 F.3d 192, 199-201 (2d Cir. 2013) ("To plead a plausible FLSA overtime claim, Plaintiffs must provide sufficient detail about the length and frequency of their unpaid work to support a reasonable inference that they worked more than forty hours in a given week.") (discussing Lundy v. Catholic Health Sys. of Long Island, Inc., 711 F.3d 106, 114 (2d Cir. 2013)). Tackie alleged that she worked a fairly regular schedule of forty hours per week, and she occasionally worked more than forty hours per week, yet she was paid only sporadically. Her handwritten records indicate that she worked overtime hours in four specific weeks, but she was not paid overtime wages. These allegations are sufficient to state a claim for failure to pay minimum and overtime wages in violation of FLSA and the NYLL.
Tackie further alleges that she did not receive written notice of her rate of pay, regular pay day, and other information as required by NYLL § 195(1)(a), nor did she receive any pay stubs, as ...