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Salustio v. 106 Columbia Deli Corp.

United States District Court, S.D. New York

August 29, 2017

RUBEN SALUSTIO, Plaintiffs,
v.
106 COLUMBIA DELI CORP., Defendants.

          OPINION AND ORDER

          GABRIEL W. GORENSTEIN, UNITED STATES MAGISTRATE JUDGE.

         Plaintiffs Ruben Salustio and Arturo Vivaldo brought this action to recover unpaid wages, overtime wages, and other damages under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”), and the New York Labor Law, N.Y. Labor Law § 1 et seq. (“NYLL”). The defendants are 106 Columbia Deli Corporation and Ibrahim Alzubairy. The Court held a bench trial on June 12, 2017, see Transcript, filed Aug. 23, 2017 (Docket # 106) (“Tr.”), and has considered the parties' pre-trial and post-trial submissions.[1]

         This Opinion and Order contains the findings of fact and conclusions of law required by Federal Rule of Civil Procedure 52(a)(1).

         I. BACKGROUND

         In brief, plaintiffs claim that they worked for defendants' delicatessen and were not properly paid under federal and state labor laws. They claim that they worked more hours than are reflected on defendants' records; that they were not paid for overtime work; that defendants did not provide them with the notices required by the NYLL; and that defendants failed to pay them “spread of hours” pay as required by the NYLL. See Pls. Post-trial Mem. at 11-18. Vivaldo, who was a delivery worker for defendants, additionally claims that defendants improperly used a “tip-credit” to calculate his hourly wage instead of paying him at the minimum wage rate. Id. at 12-17.

         As further explained below, the Court has subject matter jurisdiction over plaintiffs' federal claims pursuant to 28 U.S.C. § 1331 and supplemental jurisdiction over their state law claims under 28 U.S.C. § 1367(a).

         II. FACTS

         A. Undisputed Facts

         106 Columbia Deli Corp. is a domestic corporation that does business as a delicatessen called “106 Columbia Deli” at 945 Amsterdam Avenue in New York, New York.[2] Pretrial Order at 9. The plaintiffs are former employees of 106 Columbia Deli Corp. and of Ibrahim Alzubairy, who was the president and sole shareholder of the corporation. Id.; Alzubairy: Tr. 48-49. From its date of incorporation to the date plaintiffs filed this lawsuit, Alzubairy (1) hired and fired employees; (2) determined employees' work hours and schedules; (3) paid employees; and (4) managed and supervised employees, including the plaintiffs. Pretrial Order at 9.

         Defendants concede that Vivaldo was not paid the proper overtime rate per hour. See Defendants Proposed Findings of Fact and Conclusions of Law, filed Mar. 23, 2017 (Docket # 95), ¶ 51. Also, defendants have not disputed that plaintiffs were never given written notice of what their hourly wage would be or on what basis any reductions would be made from that wage - including, in Vivaldo's case, any “tip credit” taken - and were not given any written statements with each week's pay. (Salustio: Tr. 8; Vivaldo: Tr. 30-31; Alzubairy: Tr. 66-67, 93-94).

         B. Trial Testimony

         In the next section, we summarize the relevant testimony of each witness, without making a finding of fact as to the matters testified to. The findings of fact are contained in section I.D below.

         1. Ruben Salustio

         Salustio started working at Columbia Deli as a sandwich preparer in 2007 and stopped working there in August 2014. (Salustio: Tr. 6). He worked at the deli continuously and did not take any vacations while he worked there. (Id.). He worked 60 hours every week: from 7:00 a.m. to 4:00 p.m. on Mondays, Tuesdays, Fridays, and Saturdays, and from 7:00 a.m. to 7:00 p.m. on Wednesdays and Thursdays. (Id.). He did not receive any breaks during the workday. (Salustio: Tr. 7). Salustio was never asked to record the time at which he started or ended work, nor shown any time or pay records by Columbia Deli. (Id.).

         Salustio was hired by a man named Muhammad, who was his boss from 2007 to 2010. (Salustio: Tr. 15). He first met Alzubairy in 2007, when Alzubairy was working at Columbia Deli as a cashier. (Salustio: Tr. 14-15). Alzubairy became Salustio's boss in 2010. (Salustio: Tr. 16).

         From December 2010 until his last day at Columbia Deli, Salustio was paid $10 an hour, in cash. (Salustio: Tr. 7-8). He was never given a document informing him what his pay would be, never discussed overtime pay with anyone, and received the same pay for regular and overtime work. (Salustio: Tr. 8). He ate lunch and dinner in the store, and while he did not have to pay for sandwiches, he had to pay $1 for sodas. (Salustio: Tr. 17).

         Salustio worked next to the cash register. (Salustio: Tr. 9). He could see how much money the deli made by watching how much money went in and out from the register. (Id.). He testified the delicatessen made “$4, 000 a day.” (Id.).

         On cross-examination, Salustio testified that even though he was very busy with his work, he could still observe the money going into the cash register and keep track of the number of sandwiches sold. (Salustio: Tr. 19-22). He estimated that about 45 “big” sandwiches were sold each day, for about $6 each, and that “the sales of sandwiches, sodas, beer, [and] deliveries” reached the $4, 000 mark. (Salustio: Tr. 21-22). He also testified that he saw Alzubairy and Muhammad count the money in the cash register each evening. (Salustio: Tr. 22). He said that he saw them count the money “two or three times” on the days when he worked from 7:00 a.m. to 4:00 p.m., but watched the money being counted every day he worked from 7:00 a.m. to 7:00 p.m. (Salustio: Tr. 23).

         During cross-examination, Salustio's testimony made clear that his statement on direct examination that he worked from 7:00 a.m. to 4:00 p.m. on Saturdays was incorrect. He admitted that between 2010 and 2014 he in fact “used to help [his] brother-in-law [who had a flower shop] two or three days”; that on those two or three days he “went in at 7 a.m. and . . . left at 1 p.m.”; and that those days occurred “whenever [his brother] needed [him], ” and included Saturdays. (Salustio: Tr. 19).

         2. Arturo Vivaldo

         Vivaldo began working for Columbia Deli as a delivery person in January 2013, and stopped working there in September 2015, about four days after Salustio left. (Vivaldo: Tr. 27, 36-37).[3] He applied for the job, along with Salustio, in December 2012, but Muhammad hired Salustio instead. (Vivaldo: Tr. 33). He then was hired in 2013 by Alzubairy. (Vivaldo: Tr. 33-34). He left in 2015 because he saw Salustio and Muhammad get into an argument at “Mario Deli” at 106th Street and Amsterdam in New York, New York, about 20 meters from Columbia Deli, which was apparently where Salustio was working at a flower shop. (See Vivaldo: Tr. 37-39). He said that Muhammad was a supervisor at both Mario Deli and Columbia Deli, and that he saw this argument while he was retrieving his bicycle from Mario Deli. (Vivaldo: Tr. 38-39).

         Vivaldo's shift at Columbia Deli was from 7:00 p.m. to 7:00 a.m., seven days per week from 2013 to February 2014 and six days per week from then until September 2015. (Vivaldo: Tr. 28). He testified that he did not take any breaks while working. (Vivaldo: Tr. 29). Vivaldo was never asked to record what time he arrived or when he left work, and was not aware of any system in place at Columbia Deli by which they kept track of his hours. (Vivaldo: Tr. 28-29).

         Initially Vivaldo was paid $250 per week, plus any tips he received, but in February 2014 his weekly pay increased to $300. (Vivaldo: Tr. 29-30). He would receive the same wage even if he “worked hours beyond [his] typical schedule.” (Vivaldo: Tr. 30). He was paid in cash, and was never given any sort of document with his pay, nor any document explaining his rate of pay. (Id.). He also made a total of “[a]round 30 to 40 dollars” in tips each day, both from cash and credit card receipts. (Vivaldo: Tr. 45). No one at Columbia Deli explained to Vivaldo the basis on which Vivaldo was paid, nor how receiving tips affected his weekly pay. (Vivaldo: Tr. 30-31). Vivaldo testified that he ate sandwiches at the store twice a day and drank canned sodas, and was told that he could have them for free. (Vivaldo: Tr. 43-44).

         Vivaldo would make 20 deliveries per day during the week and about 25 per day on the weekends, with each delivery taking “six or ten minutes.” (Vivaldo: Tr. 40). Sometimes he would make multiple deliveries at once, which would take 25 to 40 minutes. (Vivaldo: Tr. 40-41). In addition to his duties as a delivery person, Vivaldo “dealt with sodas . . . [brought] ice bags, and [took] out the garbage, ” and cleaned. (Vivaldo: Tr. 27, 43). He estimated that these non-delivery tasks took him five or six hours per day, which he performed while he waited to make deliveries. (Vivaldo: Tr. 31). However, on cross-examination he testified that the five-hour figure was actually the total time spent by him and his coworker, Pedro. (Vivaldo: Tr. 41-43).

         3. Ibrahim Alzubairy

         Alzubairy was the owner and sole shareholder of 106 Columbia Deli Corp. from December 2010 until he sold the business in June 2015. (Alzubairy: Tr. 48-49). He was responsible for the finances of the business, including the filing of corporate tax returns and quarterly sales returns. (Alzubairy: Tr. 50). His business's gross receipts were $214, 011 from December 2010 to November 2011; $289, 372 from December 2011 to November 2012; $320, 375 from December 2012 to November 2013; and $374, 461 from December 2013 to November 2014. (Alzubairy: Tr. 53, 55).

         Alzubairy worked at Columbia Deli “10, 12, 14 [hours] on the weekend if they need me to stay” but was at the store “mostly during the day.” (Alzubairy: Tr. 56-57). He hired employees, paid employees, and told employees what to do - including Vivaldo and Salustio. (Alzubairy: Tr. 57-58). Alzubairy kept written records for his employees which listed how much he paid them, the dates and how many hours they worked, and how much time they took for meal breaks. (Alzubairy: Tr. 57, 59). He explained that he would write down on a sheet of paper the time that an employee came to work, and would keep using that piece of paper until Saturday. (Alzubairy: Tr. 99-100). On Saturday he would then transfer what was written on that paper to an “employee time sheet” and throw out the piece of paper. (Alzubairy: Tr. 100). These employee time sheets were admitted into evidence. Alzubairy: Tr. 59-60; 65; see also Exs. B & C (time records for Salustio and Vivaldo).

         Using the employee time sheet records, Alzubairy testified that Salustio worked about 54 hours per week when he started, and was paid a regular rate of $8.50 per hour and an overtime rate of $12.75 per hour. (Alzubairy: Tr. 59-60). At some point Alzubairy gave Salustio a raise, paying him $10 per hour regular rate and $15 per hour overtime rate. (Alzubairy: Tr. 60). He said that he was there “most of the time” when Salustio left for the day, and that Salustio never worked more than nine hours a day or 54 hours per week. (Alzubairy: Tr. 60-61). Alzubairy also saw Salustio take a 30-minute break each day and eat lunch and dinner at the deli, for which he did not have to pay. (Alzubairy: Tr. 61).

         Alzubairy also testified that Salustio would “leav[e] a lot and com[e] back.” (Alzubairy: Tr. 62). He said that Salustio would

get mad if he had a problem with a customer. . . . [F]or a small reason[ ], he [would] leave his job. If he fight with a customer for one sandwich mistake, that's it, I'm not working, or the next day never show up. . . . I feel sorry for him, and I know, like, he['s] not doing that, like, on purpose. So he quit or the next day he don't show up and go for a month, and after that come back to his job.

(Alzubairy: Tr. 63). This happened “three, four . . . or five” times, for three months or more. (Alzubairy: Tr. 96). Alzubairy would rehire Salustio when he returned (Alzubairy: Tr. 63-64) and the records reflect these periods where Salustio was absent (Alzubairy: Tr. 63).

         As to Vivaldo, Alzubairy testified that even though the records said Vivaldo's shift was from 7:00 p.m. to 3:00 a.m., he actually worked until 4:00 a.m., or 54 hours per week. (Alzubairy: Tr. 65-66). Alzubairy did not have a clear explanation for why this mistake occurred, saying “I think it was in my mind to 3 and[ ] I started doing that all the time. That's a mistake. But the total, I was right in the total, in the pay, and I'm sorry for this mistake.” (Alzubairy: Tr. 101-02).

         Alzubairy paid Vivaldo $6 per hour for all hours worked. (Alzubairy: Tr. 66). He explained:

I called my accountant. I spoke with one of his, what you call him, the payroll workers and ask[ed] him about delivery. I know it's different [from] the regular worker. In that time they told me [$]5.75, then I decided to give him [$]6. That's okay. So his hour pay was $6.

(Id.). He said that his accountant “didn't tell [him] about the overtime for the delivery boy” and he thought he was properly paying Vivaldo because “$6, plus they making a lot of tip and they [were] doing good with the tip.” (Id.). He also said that his accountant never told him anything about written notices, including for tip credits. (Alzubairy: Tr. 66-67). He said that he consulted with “payroll persons” once, and did not do anything else to determine the requirements for paying delivery workers. (Alzubairy: Tr. 73-74). He did not specifically know the payroll person's background in wage and hour laws, but believed the person gave him competent advice because as an “account office” and “as an office for employees, they know, they should know.” (Alzubairy: Tr. 88-89).

         Alzubairy knew that Vivaldo made $70-80 in tips each day because of “the records of the GrubHub, online they have three companies” that would report tips. (Alzubairy: Tr. 69). Alzubairy's cashiers would pay out Vivaldo's tips from these services. (See Alzubairy: Tr. 67). Vivaldo never worked more than nine hours a day, and Alzubairy never paid Vivaldo more than $6 an hour. (Alzubairy: Tr. 69). Alzubairy admitted that “I didn't pay [Vivaldo] for the extra hours. I didn't know that for delivery boy you have to do that.” (Alzubairy: Tr. 73).

         Alzubairy said that he was at the store during Vivaldo's shift, though not usually until the end. (Alzubairy: Tr. 67). He was sometimes there when Vivaldo took a meal break, but not always. (Id.). Alzubairy would observe Vivaldo performing 30 to 40 minutes of nondelivery work such as cleaning the floor outside and fixing “a little bit [of] soda.” (Alzubairy: Tr. 74). He had regular conversations with Vivaldo about pay and hours, beginning when Vivaldo started working. (Alzubairy: Tr. 67-68). He said that Vivaldo never complained about his hours or his pay, and “when he quit and go and work with anybody else, he [would] come back to the store ...


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