United States District Court, E.D. New York
Jianmin Jin and Chunyou Xie, on behalf of themselves and other similarly situated, Plaintiffs,
Shanghai Original, Inc.; East Brother Corp.; Always Good Brothers, Inc.; Shanghai City Corp.; Shanghai Duplicate Corp.; Kiu Sang Si a/k/a Joseph Si; Mimi Si; Yiu Fai Fong; Tun Yee Lam; and Solomon C Liou, Defendants.
OPINION & ORDER
R. ROSS, UNITED STATES DISTRICT JUDGE.
named plaintiffs, along with nine opt-in plaintiffs, bring
claims under the Fair Labor Standards Act (FLSA) and New York
Labor Law (NYLL) for violations of state and federal minimum
wage and overtime laws by Joe's Shanghai restaurant,
which has locations in Midtown Manhattan, Chinatown, and
Flushing, Queens. The named plaintiffs both worked at the
Flushing location, while the opt-in plaintiffs-with one
exception-worked in Midtown or Chinatown. The defendants have
moved to decertify the FLSA collective action conditionally
certified by Magistrate Judge Orenstein as to workers at the
Midtown and Flushing (but not Chinatown) locations of
Joe's Shanghai. The plaintiffs, in turn, have filed a
motion for final certification of this FLSA collective
action, as well as for certification of a NYLL class action.
the record developed in discovery shows that there was no
common unlawful employment policy or practice shared by the
Midtown and Flushing locations, the defendants' motion
for decertification of the collective action is granted and
the plaintiffs' cross-motion for final certification is
denied. For substantially similar reasons, the
plaintiffs' motion for class certification is denied as
to the Midtown location, but granted as to the Flushing
Joe's Shanghai restaurant
they share a single name and website, the three locations of
Joe's Shanghai are now independently owned and managed.
The website was created when Kiu Sang Si owned a part of all
three restaurants, and has not been changed since for reasons
of economy. Tun Yee Lam Decl. ¶ 18, ECF No. 98
(“Lam Decl.”); Kiu Sang Si Decl. ¶ 20, ECF
No. 99 (“Si Decl.”). Si created the menu for
Joe's Shanghai; although each location has its own chef,
the menus for all three locations are “more or less the
same.” Kiu Sang Si Dep. 36, 45-46, ECF No. 102-4
Flushing location was originally owned and operated by
Shanghai Original, Inc. Lam Decl. ¶ 2. Since 2013,
however, this location has been owned and operated by East
Brother Corp. Id. ¶¶ 1, 6. The Chinatown
location is owned and operated by Shanghai Duplicate Corp,
and the Midtown location is owned and operated by Shanghai
City Corp. Si Decl. ¶¶ 8, 13. The Chinatown and
Midtown locations do not share management or an employment
policy with the Flushing location. Id. ¶¶
Sang Si owns half of the shares of both the Chinatown and
Midtown locations. Id. ¶¶ 8- 9, 13-14. In
2013, Si sold his shares in the Flushing location to Tun Yee
Lam, who owns East Brother Corp. with Yiu Fai Fong. Si Dep.
40; Lam Decl. ¶ 6. Neither Lam nor Fong own or are
involved in managing the Chinatown or Midtown locations. Si
Decl. ¶¶ 8-9, 13-14. Si, who was once the head chef
at the Flushing location, is no longer involved with running
that location, although he still occasionally stops by the
restaurant. Lam Decl. ¶ 6; Tun Yee Lam Dep. 14, 24, ECF
No. 102-5 (“Lam Dep.”). At the Flushing location,
Fong is in charge of hiring, firing, determining work
schedules, and setting the rate of pay for dining room
workers and the present head chef, Gui Bing Shi, is in charge
of these tasks for kitchen workers. Lam Decl. ¶
2011, the Midtown location has been managed by William Ko.
William Ko Decl. ¶ 3, ECF No. 97 (“Ko
Decl.”). From 2009 to 2011, Ko was the assistant
manager. Id. As manager, Ko ensures that all
employees were paid at least the minimum wage plus overtime.
Id. ¶ 4. Ko requires employees to punch a time
card before they start work, when they finish work, and when
they take breaks or come back from breaks. Id. He
also keeps “payroll records for each employee showing
the No. of regular hours worked each week, the No. of
overtime hours worked, the employee's regular hourly
rate, overtime hourly rate, regular pay, overtime pay and
total pay earned and received each week or bi-weekly.”
Id. Each employee is required to sign these payroll
records at the time that they receive their pay. Id.
The Midtown location has kept a copy of these payroll records
for each of the eight opt-in plaintiffs who worked there. See
Id. ¶ 7-14 & Exs. C, E, G, I, K, L, N &
P. From 2009 to 2015, employees at the Midtown location were
given unpaid breaks of varying lengths-since November 2015,
some breaks have been paid. Decl. of William Ko in Opp'n
¶¶ 5-13, ECF No. 109 (“Ko Decl. II”).
In 2012, Ko instituted a policy that employees who were
required to work during unpaid breaks could apply to receive
additional pay for this work. Id. ¶ 8. He
denied that there was a “policy or practice” of
“requiring employees to perform work without pay”
or “requiring employees to work during their break
time.” Id. ¶ 15.
managers of the Flushing location claimed that it was also
the Flushing location's policy to pay all
workers-including the named plaintiffs-in accordance with
applicable minimum wage and overtime laws. Decl. of Yiu Fai
Fong in Opp'n ¶ 4, ECF No. 106 (“Fong
Decl.”); Decl. of Gui Bing Shi in Opp'n ¶ 4,
ECF No. 107 (“Shi Decl.”). The Flushing
location's payroll records, however, have been
“inadvertently . . . lost.” Fong Decl. ¶ 4.
Since at least 2013, employees at the Flushing location have
been given paid meal breaks and are not required to work
during these breaks. Decl. of Tun Yee Lam in Opp'n ¶
3, ECF No. 104 (“Lam Decl. II”).
plaintiff Chunyou Xie worked at Joe's Shanghai in
Flushing as a chef from November 15, 2014, to January 31,
2016. Compl. ¶ 56, ECF No. 1. Named plaintiff Jianmin
Jin was a kitchen worker at Joe's Shanghai in Flushing
from September 10, 2014, to May 1, 2015, and then again from
August 19, 2016, to August 29, 2016. Id.
¶¶ 48-49. Both men alleged that they were paid flat
weekly or monthly rates that were less than that required by
state and federal labor laws given the No. of hours that they
worked. Specifically, Jin claimed that he was paid a flat
rate of $470 per week for about 58 hours of work, while Xie
claimed that he was paid a flat rate of $2000 a month for
either 58 or 72 hours a week of work. See Id.
¶¶ 51, 53, 57, 58, 60.
testified consistently with this at a deposition, stating
that he worked at the Flushing location from September 2014
to May 2015, that he worked more than 11 hours a day,
five-and-a-half days a week, and that he was paid $470 a
week. Jianmin Jin Dep. 16, 18, ECF No. 96-1. Xie failed to
show up for a deposition on multiple occasions. As a
sanction, Judge Orenstein precluded Xie's testimony from
the plaintiff's case-in-chief. Sept. 25, 2017 Status
Conf. Mins., ECF No. 76.
the course of this litigation, nine plaintiffs opted in to
the collective action: Huer Huang, Hui Zhen Huang, Lian Qin
Lu, Juan Li, Guo Chang Su, Hui Qiu Chen, Xin He, Jian Ying
Lin, and Hihua Zhai (who worked under the name Bin Xu). Of
these nine opt-in plaintiffs, only one of them- Xin He-worked
at the Flushing location. Xin He worked at the Flushing,
Midtown, and Chinatown locations of Joe's Shanghai at
various times. Opt-in plaintiff Hui Qiu Chen worked at both
the Chinatown and Midtown locations, while Jian Ying Lin
worked at the Chinatown location only. The other six opt-in
plaintiffs worked solely at the Midtown
deposition, Xin He testified that he first worked at the
Midtown location of Joe's Shanghai from December 2008
until October 2011. Xin He Dep. 22, 25, ECF No. 96-15. He was
paid $2400 a month, then $2600 a month for 11 hours a day of
work. Id. at 25-26. He did not punch a time card, or
sign any record of the hours he had worked. Id. at
26-27. He then worked at the Chinatown location from October
2013 until July 2015, when he was transferred to the Flushing
location. Id. at 34-35, 45, 48. He worked at the
Flushing location as a cook from July 2015 to April 2016,
earning first $3, 000 and then $3, 200 a month. Id.
at 56. He was working 64.25 hours per week. Id. at
56-58. This time, he would punch a time card when he started
and left for the day, but not when he went on break, and he
would sign a payroll record every month. Id. at
57-58. Then, in May 2016, he was given a $200 a month raise
to move to the Midtown location, where he worked until he was
fired in August 2016. Id. at 60, 63, 65. His Midtown
payroll records, which he acknowledged signing, showed that
he worked 50-55 hours a week, with a base pay rate of $13.30
an hour and an overtime rate of $19.95 an hour. Id.
at 105-07, 110-12. He stated that these records showed his
correct pay and hours other than omitting four and one-half
hours of overtime for the three times that he stayed late to
close the Midtown location. Id. at 107-09.
the seven other opt-in plaintiffs who worked at the Midtown
location testified that, since at least 2013, (1) they were
paid at least the legal minimum wage plus overtime, (2) they
had to punch time cards, (3) they signed payroll records
every time they were paid, (4) they received notices of pay
rate and pay day, and (5) the payroll records kept by the
Midtown location were accurate. Huer Huang Dep. 22, 39-42,
ECF No. 96-2; Hui Zhen Huang Dep. 23-30, ECF No. 96-4; Lian
Qin Lu Dep. 22-24, ECF No. 96-6; Juan Li Dep. 35-38, 46-47,
ECF No. 96-8; Guo Chang Su Dep. 29-38, ECF No. 96-10; Hui Qiu
Chen Dep. 32-33, 35, 41-48, ECF No. 96-13. The sole labor
law violation mentioned by these Midtown workers in their
deposition testimony was that they were sometimes required to
do unpaid labor during their breaks. See Huer Huang Dep. 34,
39; Hui Zhen Huang Dep. 30-32; Lian Qin Lu Dep. 26-27; Guo
Chang Su Dep. 39-41. Most significantly, Lu stated that she
was sometimes required to wrap wontons for the entire length
of the break between lunch and dinner; she was not paid for
this time, but was given a one-dollar increase in her regular
hourly pay as compensation. Lian Qin Lu Dep. 26-27; Decl. of
Lian Qu Lu in Supp. of Final Certification of Collective and
Class Action ¶¶ 6-11, ECF No. 102-1.
exception to this rule was Huihua Zhai, who worked as a
delivery person at the Midtown location from November 25,
2013, to February 24, 2015. Decl. of Haihua Zhai in Opp'n
to Defs.' Mot. to Decertify Collective Action ¶ 3,
ECF No. 108-4 (“Zhai Decl.”). Like the Flushing
workers, Zhai alleged that he was paid a flat rate that was
less than he was due under minimum wage and overtime laws: He
was paid a flat rate of $200 a week, or $5 a hour (assuming a
forty-hour work week). Id. ¶¶ 4, 16. (His
notice of pay rate and pay day mentions a tip credit of $3 a
hour, which would bring him up to a rate of $8 an hour. See
Decl. of John Troy in Opp'n to Defs.' Mot. to
Decertify Collective Action, Ex. 2, ECF No. 108-2; Ko Decl.
II, Ex. Q at 5, ECF No. 109-1.) But although Zhai alleged
that he sometimes worked more than forty hours a week or
performed non-tipped labor, he was never paid more than $200
a week. Zhai Decl. ¶¶ 4, 16-18; see also Ko Decl.
II, Ex. Q at 2-4, ECF No. 109-1 (payroll records showing Zhai
was paid for forty hours at $5 an hour every week).
Jin brought a putative collective and class action on behalf
of workers at all three locations of Joe's Shanghai
restaurant alleging, inter alia: (1) violations of state and
federal minimum wage laws, Compl. ¶¶ 73-81; (2)
violations of the state and federal requirement to pay
overtime compensation for hours in excess of forty per week,
Id. ¶¶ 82-94; (3) violations of the
NYLL's requirement to provide spread-of hours pay (an
extra hour's pay at minimum wage for each day where a
worker's end time was over ten hours after their start
time), Id. ¶¶ 95-97; (4) violations of the
NYLL's requirement to provide meal periods, Id.
¶¶ 98-102; (5) violations of the NYLL's
requirement to keep payroll records, Id.
¶¶ 103-07; (6) violations of the NYLL's
requirement to provide written notice of workers' pay
rate at the time of hire, Id. ¶¶ 108-12;
and (7) violations of the NYLL's requirement to provide
detailed paystub information, Id. ¶¶
plaintiffs moved three times to certify a collective action
at the three locations of Joe's Shanghai. Magistrate
Judge Orenstein initially granted conditional certification
as to the Flushing and Midtown locations, but not the
Chinatown location. June 7, 2017 Status Conf. Mins., ECF No.
47. The parties agreed that the FLSA statute of limitations
would be tolled as of the date that the plaintiffs moved for
conditional certification: April 7, 2017. July 7, 2017 Status
Conf. Mins., ECF No. 50. Notice of this action was
disseminated to all individuals who had been employees of the
Midtown and Flushing locations at any point since April 7,
2014. See July 12, 2017 Order (approving proposed notice);
Proposed Notice, ECF No. 51. This notice states: “[y]ou
may be owed payment if you worked for Joe's Shanghai [in
Flushing or Midtown] and were not paid at least the minimum
wage for all hours worked. You may also be owed payment if
you worked for Joe's Shanghai for more than forty (40)
hours per week and you were not paid overtime.”
Proposed Notice 2, ECF No. 51. No. mention is made of any of
the other claims detailed in the complaint. See id.
plaintiffs then moved twice to expand the conditional
certification to Chinatown. See Mot. for Pre-Mot. Conf. to
Expand Conditional Certification, ECF No. 53; Mot. to Certify
FLSA Collective Action Defendants' China Town Location,
ECF No. 71. Both times, Judge Orenstein denied this
application. Aug. 21, 2017 Status Conf. Mins., ECF No. 62;
Sept. 25, 2017 Status Conf. Mins., ECF No. 76. Judge
Orenstein also denied plaintiffs' request to amend their
complaint to include workers at Joe's Shanghai in
Chinatown as named plaintiffs. See Mot. for Extension of Time
to Amend Complaint, ECF No. 64; Sept. 25, 2017 Status Conf.
Mins., ECF No. 76. Following the denial of plaintiffs'
requests to expand the collective action and amend the
complaint, plaintiffs' counsel filed a class action in
state court alleging labor law violations on behalf of three
workers at the Chinatown location-all of them opt-in
plaintiffs in this action-Jian Ying Lin, Hui Qiu Chen, and
Xin He. See CPLR § 904 Class Action Compl., ECF No.
the close of discovery, the plaintiffs moved for final
certification of the collective action and certification of a
class action. Mot. to Certify FLSA Collective Action and Rule
23 Class Action, ECF No. 100 (“Pls.' Mot.”).
The defendants filed a cross-motion seeking to decertify the
collective action. See Mot. to Decertify Collective Action,
ECF No. 94 (“Defs.' Mot.”).
The collective action will be decertified because none of the
opt-in plaintiffs are similarly situated to the named
FLSA requires employers to pay workers a minimum wage of
$7.25 an hour as well as overtime of “one and one-half
times the[ir] regular rate” for each hour worked in
excess of forty hours in a week. 29 U.S.C. §§
206(a)(1), 207(a)(2). In the case of tipped employees,
“[t]he FLSA permits employers to take a tip credit up
to 50% of the minimum wage except that the credit ‘may
not exceed the value of the tips actually received by the
employee.'” Shahriar v. Smith & Wollensky
Rest. Grp., Inc., 659 F.3d 234, 239-40 (2d Cir. 2011)
(quoting 29 U.S.C. § 203(m)). The FLSA has a two-year
statute of limitations-three years if a violation is willful.
29 U.S.C. § 255(a).
enforce their rights under the FLSA, workers can bring their
claims as collective actions. See 29 U.S.C. § 216(b).
Unlike with class actions under Federal Rule of Civil
Procedure 23, plaintiffs must affirmatively give their
written consent to join a collective action. Id. The
standards for certifying a collective action are accordingly
more lenient, since there is no concern with protecting the
due process rights of absent class members who did not choose
to join in the litigation. 1 McLaughlin on Class Actions
§ 2:16 & n.12 (14th Ed. 2017) (collecting cases).
While courts often use terms derived from class actions to
discuss collective actions, “Rule 23 actions are
fundamentally different from collective actions under the
FLSA.” Genesis Healthcare Corp v. Symczyk, 569
U.S. 66, 74 (2013); see also Myers v. Hertz Corp.,
624 F.3d 537, 555 n.10 (2d Cir. 2010).
order to join a collective action, opt-in plaintiffs must be
“similarly situated” to the named plaintiffs. 29
U.S.C. § 216(b). While the term “similarly
situated” is not defined by statute, it is a
significantly lower bar than that required for class
certification under Rule 23. Indeed, the question of whether
opt-in plaintiffs are similarly situated “is quite
distinct from the question [of] whether plaintiffs have
satisfied the much higher threshold of demonstrating that
common questions of law and fact will ‘predominate'
for Rule 23 purposes.” Myers, 624 F.3d at 556.
in the Second Circuit typically take a two-step approach to
certifying collective actions. See Id. at 554-55
(approving of, but not requiring, such a two-step approach).
“The first step involves the court making an initial
determination to send notice to potential opt-in plaintiffs
who may be ‘similarly situated' to the named
plaintiffs with respect to whether a FLSA violation has
occurred.” Id. at 555 (citations omitted).
District courts “may send this notice after plaintiffs
make a ‘modest factual showing' that they and
potential opt-in plaintiffs ‘together were victims of a
common policy or plan that violated the law.'”
Id. (quoting Hoffmann v. Sbarro, Inc., 982
F.Supp. 249, 261 (S.D.N.Y. 1997)). Then, at the second step,
“the district court will, on a fuller record, determine
whether . . . the plaintiffs who have opted in are in fact
‘similarly situated' to the named plaintiffs. The
[collective] action may be ‘de-certified' if the
record reveals that they are not, and the opt-in
plaintiffs' claims may be dismissed without
prejudice.” Id. (citations omitted).
second stage, a district court “must apply heightened
scrutiny in determining whether Plaintiffs are similarly
situated for the purposes of the FLSA.” DeSilva v.
North Shore-Long Island Jewish Health Sys.,
Inc., 27 F.Supp.3d 313, 319 (E.D.N.Y. 2014). Although
the Second Circuit has not yet provided a set of criteria for
courts to consider at this stage, district courts typically
look at the following factors: “(1) disparate factual
and employment settings of the individual plaintiffs; (2)
defenses available to defendants which appear to be
individual to each plaintiff; and (3) fairness and procedural
considerations.” Id. at 320 (quoting
Laroque v. Domino's Pizza, LLC, 557 F.Supp.2d
346, 352 (E.D.N.Y. 2008)); accord, e.g., Scott
v. Chipotle Mexican Grill, Inc., 12-CV-8333, 2017 WL
1287512, at *8 (S.D.N.Y. Mar. 29, 2017); Zivali v.
AT&T Mobility, LLC, 784 F.Supp.2d 456, 460 (S.D.N.Y.
2011) (adopting these same criteria at the conditional
The Midtown opt-in plaintiffs are not similarly situated to
the named plaintiffs because the Midtown and Flushing
locations had separate management, ownership, and employment
courts in the Second Circuit “have regularly found
named plaintiffs to be similarly situated to employees at
locations where they did not work, provided that the
plaintiffs demonstrate that they were all subject to the same
allegedly unlawful policy or practice.” Hamadou v.
Hess Corp., 915 F.Supp.2d 651, 662 (S.D.N.Y. 2013)
(emphasis added) (citing Rosario v. Valentine Ave. Disc.
Store, Co., 828 F.Supp.2d 508, 516-17 (E.D.N.Y. 2011)).
But even at the preliminary stage of conditional
certification, where the burden of proof is quite low,
“courts consider whether the plaintiffs have made an
adequate factual showing to support an inference that such a
uniform policy or practice exists, and whether the locations
share common ownership or management.” Id.
(collecting cases). Where plaintiffs cannot make this
showing, a court should not certify a collective action.
See Trinidad v. Pret A Manger USA, 982 F.Supp.2d
545, 557-60 (S.D.N.Y. 2013).
case, the factual record developed by discovery shows that
there is no uniform employment policy or practice across the
Midtown and Flushing locations, and that these locations do
not share common ownership or management. Indeed, the FLSA
claims of the Midtown opt-in plaintiffs are entirely distinct
from the claims of the named Flushing plaintiffs. Workers at
the Flushing location alleged that they were paid a flat rate
that was less than minimum wage plus overtime, while workers
at the Midtown location acknowledged that they were paid
minimum wage and overtime, but claimed that they did some
unpaid labor during meal breaks. The plaintiffs therefore
cannot even meet the showing required to certify a
conditional collective action, let alone satisfy the more
demanding showing required at the stage of final
named plaintiffs alleged that they were paid an illegally low
flat rate while working at the Flushing location. Compl.
¶¶ 51, 53, 57, 58, 60. One of the named plaintiffs
did not appear for his deposition, but the other testified
consistently at his deposition. Jianmin Jin Dep. 16, 18.
Further, although the defendants claim that they paid the
Flushing employees at least minimum wage and overtime, they
have lost the payroll records that would prove this. Fong
Decl. ¶ 4.
contrast, all of the Midtown plaintiffs besides Xin He and
Huihua Zhai explicitly acknowledged during their depositions
that they were paid at least the minimum wage and overtime
since at least 2012 or 2013.See Huer Huang Dep. 39;
Hui Zhen Huang Dep. 30; Lian Qin Lu Dep. 23-24; Juan Li Dep.
35-38; Guo Chang Su Dep. 38; Hui Qiu Chen Dep. 41-48. This is
documented in payroll records, and confirmed by the affidavit
of the Midtown manager. Ko Decl. ¶ 4, 7-14 & Exs. C,
E, G, I, K, L, N & P. Rather than claiming that they were
paid an illegally low flat rate, the Midtown opt-in
plaintiffs testified that they are owed money for unpaid
labor they performed during their meal breaks. See
Huer Huang Dep. 34, 39; Hui Zhen Huang Dep. 30-32; Lian Qin
Lu Dep. 26-27; Guo Chang Su Dep. 39-41. And not all ...