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Martinez v. Dannys Athens Diner Inc.

United States District Court, S.D. New York

December 5, 2017

ALEJANDRO BARRAGAN MARTINEZ, individually and on behalf of others similarly situated, Plaintiff,
DANNYS ATHENS DINER INC., et al., Defendants.



         On October 23, 2017, trial commenced on Plaintiffs seven causes of action: (1) minimum-wage violations under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 206; (2) minimum-wage violations under the New York Labor Law ("NYLL") § 652; (3) unpaid overtime under the FLSA, 29 U.S.C. § 207; (4) unpaid overtime under 12 N.Y.C.R.R. § 146-1.4; (5) violations of the spread-of-hours requirement under 12 N.Y.C.R.R. § 146-1.6(a); (6) failure to provide required annual written disclosures in violation of NYLL § 195 (effective Apr. 9, 2011); and (7) failure to provide pay stubs with required disclosures in violation of NYLL § 195(3). At the close of evidence, Plaintiff agreed to dismiss voluntarily his minimum-wage claims. The Court then granted Plaintiffs motion for judgment as a matter of law on all of his other causes of action, except the FLSA overtime claim, for which a jury question remained as to whether Dannys Athens Diner Inc. (doing business as "Danny's Athens Restaurant") had engaged in interstate commerce and whether it had annual sales of more than $500, 000 per year during the relevant period. See 29 U.S.C. § 203 (setting forth threshold requirements for enterprise coverage). The jury returned a verdict in favor Plaintiff on both of those issues and also found that Defendants' violations of state and federal law were willful.

         On November 16, 2017, Plaintiff filed a letter in which he identified an erroneous stipulation of law in the parties' joint proposed pre-trial order as to the method of calculating an employee's regularly hourly rate under the NYLL, the correction of which would result in lower overtime damages for the period from September 23, 2010 through December 31, 2010 but would also support a minimum-wage claim. (Doc. No. 58.) Accordingly, Plaintiff moved to reinstate his NYLL minimum-wage claim for that period. (Doc. Nos. 58, 62.) To address these issues, the Court held a conference on November 29, 2017, at which Defendants did not object to either the new method of calculation or the reinstatement of the minimum-wage claim.

         Under Fed.R.Civ.P. 15(b)(2), "[w]hen an issue not raised by the pleadings is tried by the parties' express or implied consent, it must be treated in all respects as if raised in the pleadings.'" Moreover, "[a] party may move-at any time, even after judgment-to amend the pleadings to conform them to the evidence and to raise an unpleaded issue." The law is clear that the "unpleaded issue" may include a cause of action. Sherwin-Williams Co. v. JB Collision Servs., Inc., 186 F.Supp.3d 1087, 1096-97 (S.D. Cal. 2016) (citing 6A Wright & Miller, Fed. Prac. & Proc. § 1493 (3d ed. 2017)).

         Although the Court is skeptical that unpleaded claims, or claims that were pleaded but dismissed, generally can or should be reinstated after a jury verdict, the Court will grant Plaintiffs request in the unique circumstances of this case. First, Defendant does not object to Plaintiffs request, which largely redounds to Defendant's benefit. Second, the evidence relating to Plaintiffs minimum wage claim was fully developed in discovery and thoroughly presented to the jury at trial. Based on that evidence, no reasonable juror could have found that Plaintiff was paid the minimum wage for the relevant period, or that Defendants met their burden of demonstrating that they acted in "good faith, " as required to avoid liquidated damages. See Galeana v. Lemongrass on Broadway Corp., 120 F.Supp.3d 306, 317 (S.D.N.Y. 2014). Thus, the Court grants Plaintiffs motion to reinstate his minimum-wage claim. See Fed.R.Civ.P. 15(b)(2); Sherwin-Williams Co. v. JB Collision Servs., Inc., 186 F.Supp.3d 1087, 1097 (S.D. Cal.2016).

         The Court now grants judgment as a matter of law on Plaintiffs minimum-wage claim, elaborates on the basis for its judgment as a matter of law on his other claims, and determines Plaintiffs damages. For the reasons stated on the record and set forth below, the Court concludes that Plaintiff is entitled to a final judgment of $788, 491.10 plus reasonable attorneys' fees.

         I. Legal Standard

         Federal Rule of Civil Procedure 50 provides that after a party has been fully heard on an issue during a jury trial, the court may resolve that issue against that party if the court concludes that a reasonable jury would lack a legally sufficient basis to find for the party on that issue. See Fed. R. Civ. P. 50(a). "The same standard that applies to a pre-trial motion for summary judgment pursuant to Fed.R.Civ.P. 56 also applies to motions for judgment as a matter of law during or after trial pursuant to Rule 50." Piesco v. Koch, 12 F.3d 332, 341 (2d Cir. 1993). A district court may grant a motion for a judgment as a matter of law if "the evidence is such that, without weighing the credibility of the witnesses or otherwise considering the weight of the evidence, there can be but one conclusion as to the verdict that reasonable [persons] could have reached." Cruz v. Local Union No. 3, Int'l Bhd. of Elec. Workers, 34 F.3d 1148, 1154-55 (2d Cir. 1994) (citation and internal quotation marks omitted).

         II. Discussion

         A. Liability

         1. Minimum Wage

         In 2010, the minimum wage under New York law was $7.25 per hour. See NYLL § 652(1) (incorporating federal minimum where higher); Gamero v. Koodo Sushi Corp., No. 15-cv-2697 (KPF), 2017 WL 4326116, at *12 (S.D.N.Y. Sept. 28, 2017). Before January 1, 2011, the NYLL calculated the regular hourly rate for workers on a weekly salary by dividing the salary by the number of hours worked each week. See Romero v. Anjdev Enterprises, Inc., No. 14 CIV. 457 (AT), 2017 WL 548216, at *10 (S.D.N.Y. Feb. 10, 2017); 12 N.Y.C.R.R. § 137-3.5 (repealed 2011). At trial, the unrebutted testimony was that in 2010 Plaintiff worked 84 hours per week at a rate of $550 per week. (Trial Tr. 24.) Thus, from September 23, 2010 through December 31, 2010, Plaintiff was paid approximately $6.55 per hour, 70 cents below the minimum wage. Accordingly, Defendants are liable for minimum-wage damages under the NYLL.

         2. Unpaid Overtime

         Both the FLSA and the NYLL require employers to pay a wage premium for overtime work. The requirement under both statutes is identical; once an employee works 40 hours in a week, he must be paid "one and one-half times [his] regular rate'* for all excess hours. Dejesus v. HF Mgmt. Servs., LLC, 726 F.3d 85, 88 (2d Cir. 2013) (quoting 29 U.S.C. § 207(a)(1)) (FLSA); Salustio v. 106 Columbia Deli Corp., No. 15 Civ. 6857 (GWG), 2017 WL 3736695, at * 10 (S.D.N.Y. Aug. 30, 2017) (NYLL).

         At trial, Plaintiff testified that he worked for Defendants from 5:00 a.m. to 5:00 p.m. seven days a week from September 2010 to June 2016 (i.e., 84 hours per week), and the same hours six days a week thereafter (i.e., 72 hours per week), but never received overtime. (Trial Tr. 24.) Defendants, for their part, put on virtually no evidence to rebut that testimony. Indeed, the two defense witnesses tended to corroborate, rather than contradict, Plaintiffs allegations. For example, Maximo Pacheco, one of Plaintiffs co-workers, testified that typically, when he arrived at the restaurant at 6:00 a.m., Plaintiff was already there preparing the restaurant to open. (Trial. Tr. 77.) Pacheco further stated that when he finished work at 4:00 p.m., Plaintiff typically stayed at the restaurant longer to clean up. (Trial Tr. 83.) On cross-examination, Pacheco testified that he himself worked 10 hours a day, seven days a week, and that workers at Danny's "are not paid overtime.'" (Id. at 84.) As for the other defense witness, waitress Dolores Zarantes, she confirmed that Plaintiff was always at the restaurant when she arrived at 7:00 a.m., except "maybe five times" over the course of two years, when Plaintiff came in after her. (Id. at 66.) Zarantes did not say what time of day Plaintiff left on those five occasions. Nevertheless, at the close of evidence, Plaintiff agreed to dismiss his overtime claim with respect to those five days, so as to eliminate any potential dispute of fact about overtime. (Trial Tr. 121.) Apart from those five days, the undisputed testimony at trial showed that Plaintiff worked substantially in excess of 40 hours every week and that Defendants failed to pay him an overtime premium. Accordingly, the Court finds Defendants liable for unpaid overtime under the FLSA and the NYLL.

         3. Spread-of-Hours Wages

         Under the New York Labor Law, employees are entitled to receive one additional hour's pay at the minimum hourly wage rate for any day on which the employee's spread of hours exceeds ten. See 12 N.Y.C.R.R. § 146-1.6; Gamero, 2017 WL 4326116, at *12.[1] At trial, Defendants did not dispute that they failed to pay Plaintiff spread-of-hours wages. And as discussed above, apart from the five days alluded to by Zarantes, Defendants failed to rebut Plaintiffs testimony that he worked from 5:00 a.m. to 5:00 p.m. - a spread of 12 hours every workday. ...

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