United States District Court, E.D. New York
FINDINGS OF FACT AND CONCLUSIONS OF LAW
I. LOCKE, United States Magistrate Judge
Nitin Khurana (“Plaintiff” or “Khurana)
commenced this action against Defendants Ravinder Singh
(“Singh” or “Individual Defendant”)
and JMP USA, Inc., a New York corporation (“JMP
USA” or “Corporate Defendant”)
(collectively, “Defendants”), alleging violations
of the Fair Labor Standards Act of 1938 (“FLSA”),
29 U.S.C. § 201 et seq., and New York Labor Law
(“NYLL”), N.Y. Lab. Law § 190 et
seq that occurred during his employment as an attendant
at USA Gas Station, which Defendants owned and operated.
See Docket Entry (“DE”) . This action was
assigned to this Court for all purposes pursuant to 28 U.S.C.
§ 636(c). See DE . As detailed herein, the
Clerk of the Court entered a Certificate of Default against
the Corporate Defendant on June 30, 2016. With respect to the
Individual Defendant, the Court held a bench trial on June
29, 2016. See DE , . Included with his
Proposed Findings of Fact and Conclusions of law submitted
after trial, Khurana also moved for a default judgment
against JMP USA. See DE .
the Court herein decides Plaintiff's motion and issues
its findings of fact and conclusions of law pursuant to
Fed.R.Civ.P. 52(a). Having reviewed the Complaint and
considered the evidence adduced at trial, the arguments of
counsel, the parties' post-trial submissions, and the
controlling law on the issues presented, the Court concludes
that Plaintiff has met his burden of proof on all of his
overtime and spread of hours claims arising under the FLSA
and NYLL, and that he is entitled to $39, 427.44 in damages
and prejudgment interest from both JMP USA and Singh, who are
jointly and severally liable.
of Complaint filed July 24, 2014, Plaintiff commenced this
action, seeking to recover, among other things: (i) unpaid
overtime pursuant to the FLSA and NYLL and (ii) unpaid spread
of hours compensation pursuant to the NYLL. See
Compl. ¶¶ 51-64.
their answer to the Complaint, Defendants asserted a
counterclaim alleging a discrepancy in the gas pump receipts
and records that suggested Plaintiff misappropriated funds
from JMP USA during his employment. See Answer, DE
. Defendants provide no specificity in the Answer as to
the dates on which the thefts are alleged to have occurred or
the actual amount that was stolen. See id.
October 19, 2015, the Court adopted the Proposed Joint
Pre-Trial Order and certified the completion of discovery.
See DE , . In anticipation of trial, on
December 14, 2015, both parties consented to the jurisdiction
of this Court for all purposes. See DE .
However, on December 30, 2015, Defendants filed a signed
consent to relieve their counsel and proceed pro se.
DE . After hearing from Defendants and their attorney on
January 6, 2016, the Court allowed defense counsel to
withdraw. DE . Though the Court warned Singh that day and
at each subsequent appearance that JMP USA, as a corporation,
could not proceed pro se, he as its sole officer and
shareholder nevertheless failed to retain counsel for the
Corporate Defendant. DE , , . Consequently, on
June 10, 2016, Plaintiff filed a Request for and, on June 30,
2016, the Clerk of the Court entered a Certificate of Default
against JMP USA. DE , .
the Corporate Defendant defaulted, Singh continued as a
pro se defendant with respect to his personal
liability for the FLSA and NYLL violations alleged in the
Complaint. See DE , . On June 29, 2016, the
Court conducted a bench trial on this question and to
determine what if any damages were warranted. See DE
. At trial, Plaintiff offered: (i) testimony from
himself, (ii) excerpts from Singh's deposition, and (iii)
Plaintiff's shift reports that indicated his total weekly
pay for 81 out of the 102 weeks of employment at issue.
See Id. Defendant Singh offered only his own
testimony. See Id. Following the trial, at the
Court's direction, the parties submitted their proposed
findings of fact and conclusions of law. See DE
, [42-3]. Plaintiff also sought in its submission a
default judgment against the Corporate Defendant.
See Plaintiff's Proposed Findings of Fact and
Conclusions of Law (“Pl. Findings”) at 10, DE
Default Judgment Against JMP USA
Court first turns to Plaintiff's application for a
Default Judgment against the Corporate Defendant that was
included with Khurana's Proposed Findings of Fact and
Conclusions of Law. See id.
is settled law that a corporation may not appear in a lawsuit
against it except through an attorney, and that, where a
corporation repeatedly fails to appear by counsel, a default
judgment may be entered against it pursuant to Rule 55, Fed.
R. Civ. P.” Grace v. Bank Leumi Trust Co. of
NY, 443 F.3d 180, 192 (2d Cir. 2006) (citing SEC v.
Research Automation Corp., 521 F.2d 585 (2d Cir. 1975))
(internal quotations omitted). This rule is fully applicable
even where the sole shareholder of the defaulting corporation
elects to proceed pro se regarding his personal
liability because he is, as a matter of law, situated
differently from the corporation, whose interests may at
times “overlap but are not identical in all
respects.” Grace, 443 F.3d at 192 (internal
citations and quotation marks omitted).
noted above, JMP USA consented to its attorney's
withdrawal prior to trial. See supra at 2-3.
Defendant Singh affirmatively acknowledged the consequences
of attempting to litigate his personal liability pro
se. See the Consent to Change Attorney, DE
. Despite the Court's repeated warnings that a
failure to retain counsel for the corporation would result in
a default, Singh did not retain new counsel for JMP USA.
See supra at 3. Accordingly, for the reasons
detailed below, the Court grant's Khurana's motion
for a default judgment against JMP USA in its entirety.
for default judgments are governed by Rule 55 of the Federal
Rules of Civil Procedure, which provides for a two-step
process. See Fed. R. Civ. P. 55; Priestley v.
Headminder, Inc., 647 F.3d 497, 504-05 (2d Cir. 2011).
Initially, the moving party must obtain a certificate of
default from the Clerk of the Court. See
Fed.R.Civ.P. 55(a). Once the certificate of default is
issued, the moving party must then apply for entry of a
default judgment. Id. Where a default occurs, the
well-pleaded factual allegations set forth in a complaint
concerning liability are deemed true. See Greyhound
Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d
155, 158 (2d Cir. 1992); see also Fed. R. Civ. P.
8(b)(6) (“An allegation-other than one relating to the
amount of damages-is admitted if a responsive pleading is
required and the allegation is not denied.”). However,
“just because a party is in default, the plaintiff is
not entitled to a default judgment as a matter of
right.” Profi-Parikiet Sp. Zoo v. Seneca Hardwoods
LLC, 13-CV-4358, 2014 U.S. Dist. LEXIS 71289, at *11
(E.D.N.Y. May 23, 2014) (Report and Recommendation),
adopted by, 2014 U.S. Dist. LEXIS 83128 (E.D.N.Y.
June 18, 2014) (internal quotation omitted). Rather, the
district court must determine whether the plaintiff's
allegations establish liability as a matter of law. See
City of N.Y. v. Mickalis Pawn Shop, LLC, 645 F.3d 114,
137 (2d Cir. 2011); see also Gunawan v. Sake Sushi
Rest., 897 F.Supp.2d 76, 83 (E.D.N.Y. 2012) (holding
that a plaintiff seeking a default judgment must establish
that its “uncontroverted allegations, without more,
establish the defendant's liability on each asserted
cause of action”). The decision whether to enter a
default judgment “is entrusted to the sound judicial
discretion of the court.” Allstate Ins. Co. v.
Howell, 09-CV-4660, 2013 WL 5447152, at *1 (E.D.N.Y.
Sept. 30, 2013); see also Enron Oil Corp. v.
Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993) (“The
dispositions of motions for entries of defaults and default
judgments . . . are left to the sound discretion of a
district court because it is in the best position to assess
the individual circumstances of a given case and to evaluate
the credibility and good faith of the parties.”).
response to Defendants' repeated failure to retain
counsel, Plaintiff appropriately requested a Certificate of
Default against JMP USA from the Clerk of this Court on June
10, 2016, which was properly served upon the Corporate
Defendant. DE . Moreover, the Court repeatedly cautioned
JMP USA's principal, the present pro se
defendant, that his failure to retain counsel would result in
JMP USA defaulting. See DE , , . The
Clerk then issued and entered a Certificate of Default on
June 30, 2016. See Entry of Default, DE .
Accordingly, as a default judgment would be procedurally
appropriate, the Court now examines whether Plaintiff has
established the Corporate Defendant's liability.
Overtime FLSA Claim
Complaint, Khurana first alleges that JMP USA owes him unpaid
overtime compensation pursuant to the FLSA for a period that
includes July 2, 2012 through July 6, 2014. See Pl.
Findings at 2; Compl. ¶¶ 51-64, Estimated
Calculation of Damages (“Est. Calc. of Dams”).
For the reasons set forth below, the Court finds that the
Corporate Defendant is liable with respect to this claim.
prove FLSA overtime liability Plaintiff must first establish
that JMP USA was an employer under the FLSA and was engaged
in interstate commerce. See 29 U.S.C. § 207;
D'Arpa v. Runway Towing Corp., 12-CV-1120, 2013
WL 3010810, at *13 (E.D.N.Y. June 18, 2013). The FLSA defines
“employer” as “any person acting directly
or indirectly in the interest of an employer in relation to
an employee . . . .” 29 U.S.C. § 203(d). To
determine whether an individual is an “employer”
under the FLSA, the Second Circuit utilizes the economic
realities test, which focuses on “whether the alleged
employer (1) had the power to hire and fire the employee,
(2) supervised and controlled employee work schedules or
conditions of employment, (3) determined the rate and method
of payment, and (4) maintained employment records.”
Irizarry v. Catsimatidis, 722 F.3d 99, 104-105 (2d
Cir. 2013) (citation omitted); see also Graziadio v.
Culinary Inst. of Am., 817 F.3d 415, 422 (2d Cir. 2016)
(applying factors in FMLA context). In addition, the analysis
depends on whether the defendant had “operational
control” over employees. Irizarry, 722 F.3d at
110. Operational control does not necessarily require direct
contact with employees and workplaces. See Id.
Rather, liability exists where the employer exercises control
over and makes decisions that “directly affect the
nature or conditions of the employees' employment.”
the Complaint sufficiently alleges that JMP USA was a covered
employer under the FLSA. Khurana articulates that the
Corporate Defendant owned and operated USA Gas Station where
he worked, and also that Singh, in his role as the sole
officer of JMP USA, “exercised operational control,
… controlled significant business functions …,
determined employee salaries, made hiring decisions, and
acted on behalf of and in the interest of [the Corporate
Defendant] … devising, directing, implementing, and
supervising the wage and hour practices and policies relating
to the employees.” Id. at ¶ 8.
Accordingly, the Court finds that JMP USA is properly
classified as an employer.
the Court must then determine whether the employer is engaged
in interstate commerce sufficient to apply the FLSA.
Specifically, an employer is liable for wage violations under
the FLSA “if it hires an employee who either: 1) is
engaged in commerce or in the production of goods for
commerce or 2) is employed by an enterprise engaged in
interstate commerce or in the production of goods for
interstate commerce.” See Valdez v. H & S Rest.
Operations, Inc., 14-CV-4701, 2016 WL 3079028, at *2
(E.D.N.Y. Mar. 29, 2016), (Report and Recommendation),
adopted by, 2016 WL 3087053 (E.D.N.Y. May 27, 2016).
An “enterprise engaged in interstate commerce” is
an entity “whose annual gross volume of sales made or
business done is not less than $500, 000” and has
employees that engage in interstate commerce. 29 U.S.C.
§ 203(s)(1); Valdez, 2016 WL 3079028, at *2.
alleges in the Complaint that the gross annual volume of
sales made or business done by JMP USA exceeded $500, 000,
and that “Defendants … engaged in commerce or in
the production of goods for commerce.” Compl.
¶¶ 53-54. Although Khurana does not provide
specific instances of interstate commerce, the Court can
infer an interstate nexus based upon the factual allegations
that the Corporate Defendant operated a gas station and that
Plaintiff worked as a clerk selling gasoline to customers - a
product reasonably presumed to have originated, at least in
part, outside of New York State. See Kinzer v.
Stelling, 2012 WL 1405694, at *2-*3 (M.D.Fla. Mar. 28,
2012) (finding FLSA applicable where complaint alleged that
defendant operated retail gas station, convenience store, and
car repair shop and sold gasoline and other items); see
also Cardoza v. Mango King Farmers Mkt. Corp.,
14-cv-3314, 2015 WL 5561033, at *4 (E.D.N.Y. Sept. 1, 2015),
(Report and Recommendation), adopted by, 2015 WL
5561180 (E.D.N.Y. Sept. 21, 2015) (inferring interstate
commerce where defendants were engaged in the food supply
industry because it could be reasonably inferred that some of
their products originated and/or were sold outside of New
the Corporate Defendant is deemed an employer subject to the
Court now turns to the substance of the Plaintiff's
overtime claim. The FLSA provides:
[N]o employer shall employ any of his employees who in any
workweek is engaged in commerce or in the production of goods
for commerce, or is employed in an enterprise engaged in
commerce or in the production of goods for commerce, for a
workweek longer than forty hours unless such employee
receives compensation for his employment in excess of the
hours above specified at a rate not less than one and
one-half times the regular rate at which he is employed.
29 U.S.C. § 207(a)(1).
Khurana has established an ongoing overtime violation that
includes a period running from July 2012 through to the end
of his employment in July 2014. Compl. ¶¶ 9-39.
From July 2012 through November 2012, Khuranna alleges that
he worked approximately 102 hours per week. See Id.
at ¶ 17. From November 2012 through April 2013,
Plaintiff claims that he worked approximately 96 hours per
week. See Id. ¶ 21. From April 2013 through
September 2013, Khurana alleges that he worked 102 hours per
week. See Id. ¶ 25. From September 2013 through
June 2014, Plaintiff claims to have worked 82 hours per week.
See Id. ¶ 31. In June and July of 2014, Khurana
alleges that he worked approximately 102 hours per week until
the end of his employment. See Id. ¶ 36.
to the Complaint, for all of the hours that Plaintiff worked
in excess of his initial 40 each week, Defendants only paid
him “straight time pay, ” and not the statutorily
mandated 150% overtime premium. Id. ¶¶
44-47. As such, Plaintiff properly makes out a violation of
the FLSAs overtime provisions. See Rodriguez v. Almighty
Cleaning, Inc., 784 F.Supp.2d 114, 122 (E.D.N.Y. 2011)
(“Because the Complaint alleges that Plaintiffs worked
more than 40 hours a week and were not paid time-and-a-half
for their overtime hours, Plaintiffs have sufficiently
pleaded a violation of 29 U.S.C. § 207.”).
based on the allegations set forth in the Complaint, the
Court finds JMP USA liable for failure to pay overtime in
violation of the FLSA.
Overtime Claim Under New York Labor Law
also asserts that the Corporate Defendant violated the
NYLL's overtime provisions for the same period of
employment, December 2011 through July 2014. See
Compl. ¶¶ 59-64. Applying the standards below, the
Court finds JMP USA liable for violating the overtime
provisions of the NYLL as well.
with the FLSA, the NYLL regulations state that: “[a]n
employer shall pay an employee for overtime at a wage rate of
one and one-half times the employee's regular rate . . .
.” N.Y. Comp. Codes R. & Regs. tit. 12, §
142-2.2; see Santillan v. Henao, 822 F.Supp.2d 284,
292 (E.D.N.Y. 2011) (noting that the NYLL is the “state
analogue to the federal FLSA.”). In fact, the NYLL
“mirrors the FLSA in compensation provisions regarding
overtime wages.” Valdez, 2016 WL 3079028, at
*3; D'Arpa, 2013 WL 3010810, at *18 (“[The
NYLL] otherwise echoes the FLSA in compensation provisions
regarding overtime and minimum wage requirements.”).
Consequently, the courts of the Second Circuit routinely
impose liability for an overtime violation of the NYLL if it
has already found liability under the FLSA. See Jemine v.
Dennis, 901 F.Supp.2d 365, 375 (E.D.N.Y. 2012)
(“Applying the same reasoning used in the FLSA analysis
to the state claims, this Court finds that the undisputed
allegations in the complaint and default submissions are
sufficient to impose liability on defendants under the NYLL
overtime . . . provision.”). Accordingly, as JMP USA
is considered an employer under the FLSA, it is similarly an
employer under the NYLL. See Garcia v. La Revise
Associates LLC, 08 CIV 9356, 2011 WL 135009, at *5
(S.D.N.Y. Jan. 13, 2011) (“New York's
“employer” provisions are equally broad [as that
of the FLSA].”) (quoting Spicer v. Pier Sixty
LLC, 269 F.R.D. 321, 335 n. 13 (S.D.N.Y. 2010)).
employer subject to the NYLL, the Corporate Defendant is
consequently liable for Khurana's properly pled violation
of the statute's overtime requirements. Plaintiff pleads
that he worked in excess of forty hours per week, stating, in
fact, that he regularly worked at least 82 hours per week
from January 2011 through July 2014, working either six or
seven days each week. Compl. ¶¶ 12-39. During this
time period, Defendants compensated him only at the regular
hourly rate without any premium compensation for those hours
worked in excess of his first 40 per week. Id.
¶¶ 62-63. Accordingly, a default judgment against
JMP USA is appropriate not only under the FLSA but also under
Spread of Hours
Corporate Defendant is also liable for violating the spread
of hours provisions of the NYLL because JMP USA never
provided any additional compensation to Plaintiff for
Khurana's shifts that exceeded ten hours in length.
“The relevant regulation of the New York State
Department of Labor ... provides, in pertinent part, that,
‘in addition to the minimum wage, ' if an employee
works in excess of 10 hours in a day, ‘[a]n employee
shall receive one hour's pay at the basic minimum hourly
wage rate.'” Chuchuca v. Creative Customs
Cabinets Inc., 13-Civ.-2506, 2014 WL 6674583, at *10
(E.D.N.Y. Nov. 25, 2014) (quoting N.Y. Comp. Codes R. &
Regs. tit. 12, § 142-2.4). As of December 31, 2013, the
basic minimum hourly wage rate rose to $8.00 per hour in New
York State. See 12 N.Y.C.R.R. § 142-2.1.
Plaintiff states in the Complaint that, during his entire two
years of employment at USA Gas Station, Defendants never paid
him any premium beyond his wage of $8.00 per hour even when
he worked a shift in excess of ten hours. See Compl.
¶¶ 46-49, 65-68. Thus, from December 31, 2013
through July 7, 2014, Defendant was being paid at the minimum
wage. Compare 12 N.Y.C.R.R. § 142-2.1.
with Compl. ¶¶ 46-49, 65-68. Accordingly,
in addition to the ongoing overtime violation discussed
above, Plaintiff is also entitled to unpaid spread of hours
compensation for each day he worked for the Corporate
Defendant during this time period.
NYLL 195 Wage Notice Statutory Penalties
Khurana is entitled to a judgment against JMP USA regarding
his overtime and spread of hours causes of action, the Court
denies Plaintiff's demands for NYLL section 195(1) and
195(3) Wage Statement Statutory Penalties as they were not
included in the Complaint and instead both raised for the
first time in the present motion. As noted above, under
Federal Rule of Civil Procedure 55(a) “[w]hen a party
against whom a judgment for affirmative relief is sought has
failed to plead or otherwise defend, ” the defaulting
defendant is deemed to admit every well-pleaded
allegation in the complaint. See Greyhound
Exhibitgroup, Inc. v. E.L .U.L. Realty Corp., 973 F.2d
155, 158 (2d Cir. 1992), cert. denied, 506 U.S.
1080, 113 S.Ct. 1049 (1993) (emphasis added); Montcalm
Pub. Corp. v. Ryan,807 F.Supp. 975, 977 (S.D.N.Y.
1992). This presumption is predicated upon the complaint
giving the opposing party notice as to what specific relief
its adversary seeks and what provision of which law is being
invoked. See Vermont Teddy Bear Co. v. 1-800 Beargram
Co., 373 F.3d 241, 245-46 (2d Cir. 2004). Accordingly, a
plaintiff may not seek damages tied to causes of action not
pled in the unanswered complaint by raising them for the
first time as part of a motion for default judgement.
See Fed. R. Civ. P. 54(c) (“A default judgment
must not differ in kind from, or exceed in amount, what is
demanded in the pleadings.”); Silge v. Merz,
510 F.3d 157, 160 (2d Cir.2007) (declining to award
pre-judgment interest where plaintiff failed to include a
claim for such damages in the demand clause, and noting that
“[b]y operation of Rule 54(c), his failure to do so,
intentional or not, ran the risk that his damages would be
limited in the event of default.”); Trustees ...