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Ortega v. JR Primos 2 Restaurant Corp.

United States District Court, S.D. New York

June 16, 2017

PEDRO ORTEGA, individually and on behalf of others similarly situated, Plaintiff,
v.
JR PRIMOS 2 RESTAURANT CORP. d/b/a JR PRIMOS 2 and ROBERTO VALENZUELA, Defendants.

          MEMORANDUM AND ORDER

          JAMES C. FRANCIS, IV UNITED STATES MAGISTRATE JUDGE

         The plaintiff, Pedro Ortega, brings this action against JR Primos 2 Restaurant Corp. ("JR Primos 2") and Roberto Valenzuela alleging violations of the Fair Labor Standards Act (the "FLSA") and the New York Labor Law (the "NYLL").[1] After counsel for the defendants withdrew in December 2016, I ordered the defendants to advise the Court whether they had retained new counsel or planned to proceed pro se by January 16, 2017, and warned that failure to comply with the Order could result in the entry of a default judgment. (Order dated Dec. 14, 2016). The defendants failed to comply with the Order, and the plaintiff moved for entry of a default judgment, in response to which I ordered an inquest to determine damages. (Memorandum Endorsement dated Feb. 6, 2017). The defendants did not appear at the inquest, which was held on April 4, 2017. The following findings are therefore based on evidence provided by the plaintiff. For the reasons set forth below, judgment by default is entered against the defendants, and the plaintiff is awarded $46, 929.45 in unpaid wages, $11, 431.16 in prejudgment interest, $46, 929.45 in liquidated damages, and $5, 102.50 in attorneys' fees and costs.

         Background

         Mr. Ortega worked as a deliveryman and dishwasher at JR Primos 2, a restaurant owned and operated by Roberto Valenzuela. (Complaint (“Compl.”), ¶¶ 3, 7, 41; Tr. at 4-5).[2] He alleges that the defendants violated the FLSA and the NYLL by failing to pay him minimum wage, overtime, and “spread-of-hours” compensation. (Compl., ¶ 16). Specifically, he alleges that he worked at JR Primos 2 from August 2011 through November 20, 2015, the date on which he filed the Complaint. (Compl., ¶¶ 21, 41); that he worked seven days per week from 6:00 a.m. to 4:00 p.m. without any breaks for meals or rest (Compl., ¶¶ 48, 51); and that he was paid $370.00 in cash per week (Compl., ¶¶ 49-50). He alleges further that the defendants never provided him with written notice of his rate of pay, provided wage statements, provided notice of how his tips were credited toward his wages, or tracked the hours that he worked. (Compl., ¶¶ 52-56). Finally, he alleges that the defendants required him to purchase a bicycle, helmet, jacket, and bike lights to complete his duties as a deliveryman at a total cost of $325.00. (Compl., ¶ 58).

         In addition to the allegations in the Complaint, Mr. Ortega supported his application for damages with his own testimony at the inquest. He could not recall the specific dates of his employment at the hearing. Rather, he testified that he worked at JR Primos 2 for four years beginning “in the summertime” four years ago. (Tr. at 6). He also testified that he worked from 5:00 a.m. to 4:00 p.m. every day (Tr. at 7-8), as opposed to starting the day at 6:00 a.m. Finally, he testified that he was paid $350.00 per week for the first three years of his employment and $370.00 per week during the final year of his employment (Tr. at 7-8), as opposed to $370.00 per week throughout the duration of his employment. The remainder of Mr. Ortega's testimony -- the defendants' failure to provide him with notice of his rate of pay, provide wage statements, provide notice of how his tips were credited to his wages, track his hours worked, or reimburse him for purchasing “tools of the trade” -- is consistent with the allegations in the complaint. (Tr. at 9-11).

         Discussion

         A. Liability

         Where a defendant has defaulted, all of the facts alleged in the complaint, except those relating to the amount of damages, must be accepted as true. See Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., Division of Ace Young Inc., 109 F.3d 105, 108 (2d Cir. 1997); Keystone Global LLC v. Auto Essentials, Inc., 12 Civ. 9077, 2015 WL 224359, at *3 (S.D.N.Y. Jan. 16, 2015). The court may also rely on factual allegations pertaining to liability contained in affidavits and declarations submitted by the plaintiff. See, e.g., Grammar v. Sharinn & Lipshie, P.C., No. 14 Civ. 6774, 2016 WL 4249155, at *2 (S.D.N.Y. Aug. 5, 2016). Nonetheless, a court is “required to determine whether the [plaintiff's] allegations establish [the defendant's] liability as a matter of law.” Hood v. Ascent Medical Corp., No. 13 Civ. 628, 2016 WL 1366920, at *14 (S.D.N.Y. March 3, 2016) (alterations in original) (quoting City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011)).

         1. Prerequisites for FLSA and NYLL Coverage

         The plaintiff's allegations establish that the defendants are subject to liability under the FLSA and the NYLL. The Complaint alleges that JR Primos 2 was an enterprise engaged in interstate commerce that had revenue of at least $500, 000 annually. (Compl., ¶¶ 37-38). It alleges further that Mr. Valenzuela had control over employment practices at the restaurant. (Compl., ¶¶ 26-27, 36). JR Primos 2 is therefore an “enterprise engaged in commerce” under the FLSA, and the defendants qualify as “employers” under both the FLSA and the NYLL. 29 U.S.C. § 203(d), (r)(1), (s)(1)(A)(i)-(ii); NYLL §§ 190(2)-(3), 198(1)-(4), 651(5)-(6); Herman v. RSR Security Services Ltd., 172 F.3d 132, 139 (2d Cir. 1999) (“[T]he overarching concern is whether the alleged employer possessed the power to control the workers in question, with an eye to the ‘economic reality' presented by the facts of each case.” (internal citation omitted) (quoting Goldberg v. Whitaker House Cooperative, Inc., 366 U.S. 28, 33 (1961))); Rosas v. Alice's Tea Cup, LLC, 127 F.Supp.3d 4, 13 (S.D.N.Y. 2015) (“[D]istrict courts in this Circuit have interpreted the definition of employer under the [NYLL] coextensively with the definition used by the FLSA.” (second alteration in original) (quoting Sethi v. Narod, 974 F.Supp.2d 162, 188 (E.D.N.Y. 2013))). The plaintiff also alleges that he was an employee of JR Primos 2. (Compl., ¶ 5). Thus, the prerequisites for coverage under both the FLSA and NYLL are met.

         2. Statute of Limitations

         The statute of limitations is six years for claims under the NYLL and three years for claims under the FLSA if a defendant's acts are willful. 29 U.S.C. § 255(a); NYLL §§ 198(3), 663(3); Herrara v. 12 Water Street Gourmet Cafe, Ltd., No. 13 Civ. 4370, 2016 WL 1274944, at *4 (S.D.N.Y. Feb. 29, 2016). The Complaint, filed on November 20, 2015, properly pleads willfulness (Compl., ¶¶ 71-78), so the plaintiff may recover under the FLSA for violations occurring after November 19, 2012, and under the NYLL for violations occurring after November 19, 2009.

         3. Unpaid Minimum Wage

         Both the FLSA and the NYLL mandate that employees be paid at least a minimum hourly rate.[3] 29 U.S.C. § 206(a)(1); NYLL § 652(1); N.Y. Comp. Codes R. & Regs. tit. 12 (“12 NYCRR”), § 146-1.2. “The federal minimum wage does not preempt the state minimum wage, and a plaintiff may recover under whatever statute provides the highest measure of damages.” Wicaksono v. XYZ 48 Corp., No. 10 Civ. 3635, 2011 WL 2022644, at *3 (S.D.N.Y. May 2, 2011) (internal citation omitted), report and recommendation adopted, 2011 WL 2038973 (S.D.N.Y. May 24, 2011). In the period at issue -- August 2011 to November 20, 2015 -- the plaintiff was entitled to a minimum wage of $7.15 per hour from August 2011 to November 19, 2012, [4] see NYLL § 652(1); $7.25 per hour from November 20, 2012, to December 30, 2013, see 29 U.S.C. § 206(a)(1); NYLL § 652(1) $8.00 per hour from December 31, 2013, to December 30, 2014, see 29 U.S.C. § 206(a)(1); NYLL § 652(1); and finally to $8.75 per hour from December 31, 2014, to November 20, 2015, see 29 U.S.C. § 206(a)(1); NYLL § 652(1).

         When an employee is paid a flat weekly salary, “there is a rebuttable presumption that [it] covers 40 hours, ” which an employer can overcome “by showing the existence of an employer-employee agreement that the salary cover a different number of hours.” Yuquilema v. Manhattan's Hero Corp., No. 13 Civ. 461, 2014 WL 4207106, at *5 (S.D.N.Y. Aug. 26, 2014) (quoting Doo Nam Yang v. ACBL Corp., 427 F.Supp.2d 327, 335 (S.D.N.Y. 2005)). The defaulting defendants have provided no evidence to rebut the presumption here. The plaintiff's weekly salary should therefore be divided by forty hours per week in determining whether the defendants violated the minimum wage laws. The lowest weekly salary the plaintiff alleges is $350.00, or $8.75 per hour ($350 per week/40 hours per week). At no point during the plaintiff's employment was the minimum wage above $8.75 per hour. Therefore, the plaintiff has not established liability for unpaid minimum wages based on his weekly salary.

         However, the plaintiff also alleges that the defendants failed to pay him at all for an unspecified “extended period of time” (Compl., ¶ 50); his testimony clarifies that he was not paid for one full week of work at the end of his employment (Tr. at 11). The testimony therefore establishes liability for unpaid minimum wages during that week.

         4. Unpaid Overtime

         Both the FLSA and the NYLL provide that a non-exempt employee must be paid one and one-half times his regular rate for hours worked in excess of forty hours per week. 29 U.S.C. § 207(a)(1); 12 NYCRR § 146-1.4. The plaintiff alleges that he worked more than forty hours per week during every week that he worked for the defendants and that he was not compensated at one and one-half times his regular hourly rate for hours worked in excess of forty hours per week. (Compl., ¶¶ 15, 47-50). Therefore, he has established the defendants' liability for unpaid overtime under the FLSA and the NYLL.

         5. Unpaid ...


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