United States District Court, S.D. New York
LEDIA PEREZ, ALBERTO GONZALEZ, HUMBERTO PEREZ, and ALI MURO, Plaintiffs,
PLATINUM PLAZA 400 CLEANERS, INC. (d/b/a SPLENDID CLEANERS), PLATINUM STAR ENTERPRISES LLC (d/b/a SPLENDID CLEANERS), and DAISY HUANG, Defendants.
OPINION & ORDER
PAUL A. CROTTY, District Judge.
On January 20, 2015, the Court held a bench trial in this wage-and-hour matter in which Plaintiffs allege violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq., and the New York Labor Law ("NYLL"), §§ 650 et seq. Plaintiffs Ledia Perez ("L. Perez"), Alberto Gonzalez ("Gonzalez"), Humberto Perez ("H. Perez"), and Ali Muro ("Muro") (collectively, "Plaintiffs") each testified, as did Jessie Wu, the manager of Splendid Cleaners. Subsequently, the parties submitted proposed findings of fact and conclusions of law, as well as proposed damages calculations. The Court finds for Plaintiffs and awards damages in the amounts indicated below.
Plaintiffs are former employees of Defendants Platinum Plaza 400 Cleaners, Inc., Platinum Star Enterprises LLC (collectively, d/b/a Splendid Cleaners), and Daisy Huang, the owner of Splendid Cleaners (collectively, "Defendants"). Stipulated Facts ¶¶ 3-10. Splendid Cleaners owns and operates several full service dry cleaners and laundromats, with locations at 409 East 55th Street, 414 East 58th Street, and 552 Hudson Street in New York. Id. ¶ 4. Ledia Perez worked for Defendants washing, packing, ironing, and retouching clothes from 2008 until October 3, 2012. Id. ¶ 7. Alberto Gonzalez worked for Defendants as a delivery person and packer from June 2009 until November 15, 2013. Id. ¶ 8. Humberto Perez worked for Defendants organizing, packing, and retouching clothing from 2009 until October 20, 2012. Id. ¶ 9. Ali Muro worked as a clothing packer and delivery person from May 2007 until December 2007 and then again from December 2008 until April 20, 2013. Id. ¶ 10.
Plaintiffs were paid in cash. Id. ¶ 11. Starting January 25, 2010, Defendants kept handwritten records of Plaintiffs' hours. Id. ¶ 12. Where records exist, Plaintiffs have calculated their damages based on the hours recorded. Androphy Decl. ¶¶ 3-4. For periods for which there are no records, Plaintiffs have calculated damages based on unrefuted testimony. Id. ¶¶ 5-9.
Ledia Perez was paid $400 per week until approximately early 2010,  when she was paid $430 per week. Stipulated Facts ¶ 13. At trial, she testified that her recorded start times were not accurate because Defendants required her to arrive thirty minutes early to turn on the cleaning machines. Tr. 51:18-20, 52:1-16, 57:4-13). Humberto Perez was paid $400 per week. Id. ¶ 14. Alberto Gonzalez was paid $400 per week from June 6, 2009 through December 17, 2012 and $460 thereafter. Id. ¶ 15. Ali Muro was paid $400 per week. Id. ¶ 16.
In pre-trial papers and at trial, Plaintiffs argued that they were forced to wait an extra two hours every other Friday to receive their pay, for which they received no compensation. Pl. Pre-Trial Mem. ¶¶ 12, 22, 40, Tr. 42:17-23. At trial, the Court granted Defendants' motion to strike that portion of the claim, finding that there was no productive work being done at that time and that the delay was for the convenience of the plaintiffs and not the defendants. Tr. 95:9-19.
During his testimony, Muro argued that the records of his hours were incorrect. Tr. 28:23-29:20, 33:24-34:24, 34:7-18, 35:10-22, 38:9-40:5. The Court overruled these objections, finding that the records were accurate. Tr. 96:5-14.
In 2010, a consent judgment was entered against Defendants for previous wage and hour violations. See Solis v. Platinum First Cleaners et al., 10 Civ. 9415. The consent judgment includes a list of employees owed money pursuant to the judgment, and states that the order does not affect the ability of employees not listed to recover for any violations, or the ability of listed employees to recover for subsequent violations after December 5, 2009. Id. at 7.
II. Conclusions of Law and Damages Calculations
A. Regular Rate of Pay and Actual Damages
Under the FLSA and the NYLL, all employers must compensate employees for hours worked over forty hours per week at a rate not less than 1.5 times the regular rate of pay. 29 U.S.C. § 207(a)(1); N.Y. Lab. Law § 663(1); N.Y. Comp. Codes R. & Regs. tit. 12, § 142-2.2.
Plaintiffs argue that their rate of pay should be calculated by dividing the weekly salary rate by forty hours in light of the rebuttable presumption under the Fair Labor Standards Act ("FLSA") that a flat weekly salary is intended to cover 40 hours per week. Pl. Mem. at 1-2. Plaintiffs assert that such calculations reveal that Defendants have failed to pay Plaintiffs the legally mandated overtime rate. Defendants argue instead that the rate should be calculated by dividing the weekly salary rate by the hours actually worked, revealing instead that some weeks Plaintiffs were overpaid. Def. Mem. at 2-5.
The Court agrees with Plaintiffs and finds that Defendants have not overcome the presumption that a flat weekly salary is intended to compensate employees for forty hours of work per week. "Under both the FLSA and NYLL, ... there is a presumption that such a weekly salary covers only the first forty hours, unless the parties intend and understand the weekly salary to include overtime hours at the premium rate.'" Guallpa v. N.Y. Pro Signs Inc., 2014 WL 2200393, at *4 (S.D.N.Y. May 27, 2014) (quoting Giles v. City of N.Y., 41 F.Supp.2d 308, 317 (S.D.N.Y. 1999)). "An agreement for a fixed weekly salary for more than 40 hours of work per week only complies with the FLSA and Labor Law if there is an explicit understanding between the employer and employee as to regular and overtime rates." Amaya v. Superior Tile and Granite Corp., 2012 WL 130425, at *9 (S.D.N.Y. Jan. 17, 2012). Here, the record is completely devoid of any evidence of an agreement or understanding between Plaintiffs and Defendants regarding what the weekly salary was intended to cover. Defendants have not even come close to rebutting the presumption, and accordingly the Court calculates Plaintiffs' damages at a rate determined by dividing the weekly salary rate by forty. Thus Plaintiffs are owed the amounts reflected below in unpaid overtime wages.
B. Liquidated Damages
The FLSA grants liquidated damages for violations of the overtime provision in an amount equal to that of actual damages. 29 U.S.C. § 216(b). While an exception exists for employers who acted in good faith, id. § 260, Defendants have not demonstrated the existence of good faith. To establish good faith, the employer "must show that it took active steps to ascertain the dictates of the FLSA and then act to comply with them." Barfield v. N.Y.C. Health and Hosps. Corp., 537 F.3d 132, 150 (2d Cir. 2008) (internal citations and quotation marks omitted). Defendants argue that they acted in good faith because they had previously been sued by the Department of Labor and thus knew the FLSA requirements, and Jessie Wu testified that she attempted to follow the instructions of a DOL investigator. Tr. 68:18-25. But merely knowing the rules of the FLSA and allegedly attempting to meet them does not demonstrate good faith; indeed, it demonstrates the opposite. See Solis v. Cindy's Total Care, Inc., 2012 WL 28141, ¶¶ 34-35 ("Defendants have not established that they acted in good faith in violating the FLSA. Quite the contrary: The defendants knew of the overtime pay and recordkeeping requirements of the FLSA following the Department of Labor's initial investigation... [B]y virtue of the outcome of the first investigation, [Defendant] is a recidivist as to FLSA violations, which is also inconsistent with a finding of good faith."); accord Karic v. Major Auto. Cos. Inc., 992 F.Supp.2d 196, 203-04 (E.D.N.Y. 2014).
The NYLL also authorizes liquidated damages unless the employer has shown good faith. N.Y. Lab. Law § 198(1-a). Although there is a split of authority on whether a plaintiff may recover liquidated damages under both the FLSA and the NYLL for the same violations during the same time period, courts in the Second Circuit have allowed for the simultaneous recovery of both forms of liquidated damages. See Yu Y. Ho v. Sim Enters., 2014 WL 1998237, at *18-19 (S.D.N.Y. May 14, 2014); accord Easterly v. Tri-Star Transport, 2015 WL 337565, at *2 (S.D.N.Y. Jan. 23, 2015).
Before April 9, 2011, the NYLL allowed for liquidated damages recovery at a rate of 25% of unpaid wages. See 2010 N.Y. Sess. Laws Ch. 564 (S. 8380) (McKinney) (deleting the provision setting liquidated damages at 25% of actual damages). Since April 9, 2011, the NYLL has ...