United States District Court, E.D. New York
EDGAR BAIZAN GUERRERO, individually and on behalf of all others similarly situated, Plaintiff,
79TH STREET GOURMET & DELI INC. D/B/A GOURMET DELI & GROCERY, NEW UTRECHT GOURMET DELI AND GROCERY INC. D/B/A GOURMET DELI & GROCERY, COLUMBUS GROCERY AND DELI CORP. D/B/A GOURMET DELI & GROCERY, MOHAMED S. MUTHANA, AND AHMED F. MUSTAFA, Defendants.
REPORT AND RECOMMENDATION
L. Tiscione United States Magistrate Judge
Edgar Baizan Guerrero brought this action against five
Defendants-79th Street Gourmet & Deli Inc. (d/b/a Gourmet
Deli & Grocery), New Utrecht Gourmet Deli and Grocery
Inc. (d/b/a Gourmet Deli & Grocery), Columbus Grocery
Deli Corp. (d/b/a Gourmet Deli & Grocery)
(“Corporate Defendants”), Mohamed S. Muthana, and
Ahmed F. Mustafa (“Individual
Defendants”)-alleging that they employed him as a grill
and deli worker and, in the course of his employment,
violated the Fair Labor Standards Act, 29 U.S.C. § 201
et seq., (“FLSA”) and several provisions
of the New York Labor Law (“NYLL”), N.Y. Lab. Law
§ 650 et seq. Plaintiff moved for default
judgment upon Defendants' failures to answer or otherwise
respond to the Complaint despite proper service and, on
December 7, 2018, the Honorable Allyne R. Ross referred the
motion to this Court for a report and recommendation.
on a review of the well-pleaded allegations and evidence
presented in Plaintiff's filings, I respectfully
recommend that the Court grant Plaintiff's motion for
default judgment and enter damages as described herein.
approximately July 2015 until August 12, 2018, Plaintiff
worked as a grill and deli worker at two delis owned and
operated by Defendants under the name Gourmet Deli &
Grocery and located at 7818 New Utrecht Ave., Brooklyn, NY
11214 (“New Utrecht Location”) and at 8523
18th Ave., Brooklyn, NY 11214
(“18th Ave. Location”). See
Dkt. No. 1 (“Compl.”) ¶¶ 4, 35; Dkt.
No. 21-12 (Declaration of Edgar Baizan Guerrero)
(“Baizan Decl.”) ¶¶ 8-9. Individual
Defendants served as the owners, managers, principals or
agents of the Corporate Defendants, and controlled the wages
and hours of Gourmet Deli's employees. See
Compl. ¶ 3; Baizan Decl. ¶ 4.
regularly worked in excess of 40 hours per week at the New
Utrecht Location from July 2015 until May 2018, and then at
the 18th Ave. Location from May 2018 until August
12, 2018. See Compl. ¶¶ 40-42; Baizan
Decl. ¶¶ 14-17. Throughout his employment,
Plaintiff was paid a fixed rate in cash, irrespective of the
number of hours he worked: from approximately July 2015 until
May 2018, Plaintiff was paid $11.00 per hour, and from
approximately May 2018 until August 12, 2018, Plaintiff was
paid $12.00 per hour. See Compl. ¶¶ 43-45;
Baizan Decl. ¶¶ 18- 20. Further, Plaintiff was
never: (1) granted any breaks or meal periods; (2) required
to track his time; or (3) provided with any wage statements
or documents reflecting minimum wage and overtime
requirements under New York State or federal law.
See Compl. ¶¶ 46-50; Baizan Decl.
initiated this putative collective action on August 22, 2018
to recover unpaid minimum and overtime wages under the FLSA
and NYLL, and spread-of-hours pay, liquidated and statutory
damages, interest, attorneys' fees and costs under the
NYLL. Compl. ¶ 10. Corporate Defendants were duly served
with copies of the Summons and Complaint via the Secretary of
State on August 23, 2018. See Dkt. Nos. 6-8;
Fed.R.Civ.P. 4(e)(1); N.Y. Bus. Corp. Law § 306(b).
Individual Defendants were duly served on September 4, 2018
when copies of the Summons and Complaint were delivered to a
person of suitable age and discretion at Individual
Defendants' actual place of business and by mailing the
same via first class mail to Individual Defendants'
actual place of business. See Dkt. Nos. 9-10; N.Y.
Civ. Prac. Laws and Rules (“C.P.L.R.”) §
308(2). On October 15, 2018, the Clerk of Court certified
Defendants' default pursuant to Fed.R.Civ.P. 55(a) upon
Defendants' failure to answer or otherwise respond to the
Complaint. Dkt. No. 14.
November 21, 2018, Plaintiff moved for default judgment, but
did not submit an accompanying memorandum of law. Dkt. Nos.
17-19. Therefore, on December 4, 2018, with leave from the
Court, Plaintiff re-filed his motion, accompanied by a
Memorandum of Law in Support of Plaintiff's Motion. Dkt.
Nos. 20-22. The Honorable Allyne R. Ross then referred the
motion to this Court for a report and recommendation on
December 7, 2018. Dkt. No. 23.
served Defendants with the Notice of Motion for Default
Judgment, the Declaration of Michael Faillace in Support of
Plaintiff's Motion, and the Memorandum of Law in Support
of Plaintiff's Application for Default Judgment, on
December 12, 2018. Dkt. No. 24. Although Plaintiff originally
sought designation of this action as a collective action
pursuant to 29 U.S.C. § 216(b) (Compl. ¶ 34), he
has not reiterated this request in the present motion, and
therefore the Court will consider his request to have been
waived. See Galicia v. 63-68 Diner Corp., No.
13-CV-3689 (PKC), 2015 U.S. Dist. LEXIS 40599, at *2
(E.D.N.Y. Mar. 30, 2015) (citing Rodrigues v. Almighty
Cleaning, Inc., 784 F.Supp.2d 114, 133 (E.D.N.Y. 2011))
(finding collective action request waived where Plaintiff
failed to reiterate request in motion for default judgment).
Federal Rules of Civil Procedure prescribe a two-step process
for a plaintiff to obtain a default judgment. First, when
“a party against whom a judgment for affirmative relief
is sought has failed to plead or otherwise defend, and that
failure is shown by affidavit or otherwise, the clerk must
enter the party's default.” Fed.R.Civ.P. 55(a).
Second, after a default has been entered against a defendant,
and the defendant fails to appear or move to set aside the
default under Rule 55(c), the Court may, on a plaintiff's
motion, enter a default judgment. Fed.R.Civ.P. 55(b)(2).
defendant is found to be in default, he is deemed to have
admitted all of the well-pleaded allegations in the complaint
pertaining to liability. Greyhound Exhibitgroup, Inc. v.
E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992).
However, a district court retains the discretion to determine
whether a default judgment is appropriate based on the
specific circumstances of a given case. Enron Oil Corp.
v. Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993); see
also Taylor v. 312 Grand St. LLC, No. 15-CV-5410 (BMC),
2016 U.S. Dist. LEXIS 36623, at *7 (E.D.N.Y. Mar. 22, 2016)
(“[J]ust because a party is in default, the plaintiff
is not entitled to a default judgment as a matter of
right.”) (citations omitted). In light of the Second
Circuit's “oft-stated preference for resolving
disputes on the merits[, ]” default judgments are
“generally disfavored[, ]” and any “doubt
should be resolved in favor of the defaulting party.”
Enron, 10 F.3d at 95-96.
despite a defendant's default, the plaintiff bears the
burden of demonstrating that the unchallenged allegations and
all reasonable inferences drawn from the evidence provided
establish the defendant's liability on each asserted
cause of action. City of New York v. Mickalis Pawn Shop,
LLC, 645 F.3d 114, 137 (2d Cir. 2011) (citation
omitted); see also, e.g., Au Bon Pain Corp. v. Artect,
Inc., 653 F.2d 61, 65 (2d Cir. 1981) (reversing
dismissal where district court failed to accept the
plaintiff's factual allegations as true). In other words,
“after default . . . it remains for the court to
consider whether the unchallenged facts constitute a
legitimate cause of action, since a party in default does not
admit conclusions of law.” Rolls-Royce PLC v.
Rolls-Royce USA, Inc., 688 F.Supp.2d 150, 153 (E.D.N.Y.
2010) (citations omitted).
Whether This Court Has Jurisdiction
reasons discussed below regarding the applicability of the
FLSA to Defendants' employment of Plaintiff, this Court
concludes that federal question jurisdiction exists for
Plaintiff's FLSA claims. See 28 U.S.C. §
1331. Where original jurisdiction exists, a district court
“shall have supplemental jurisdiction over claims that
are so related to claims in the action within such original
jurisdiction that they form part of the same case or
controversy under Article III of the United States
Constitution.” 28 U.S.C. § 1367(a). Under §
1367, claims form part of the same case or controversy if
those claims “derive from a common nucleus of operative
fact.” United Mine Workers v. Gibbs, 383 U.S.
715, 725 (1966); accord Kegun Chen v. Oceanica Chinese
Rest., Inc., 13-CV-4623 (NGG) (PK), 2018 U.S. Dist.
LEXIS 140925, at *5 (E.D.N.Y. 2018). “It is well
settled that NYLL and FLSA claims that arise out of the same
compensation policies and practices derive from the same
common nucleus of operative fact.” Salustio v. 106
Columbia Deli Corp., 264 F.Supp.3d 540, 551 (S.D.N.Y.
2017) (citing Shahriar v. Smith & Wollensky Rest.
Grp., Inc., 659 F.3d 234, 245 (2d Cir. 2011) (other
Plaintiff's NYLL and FLSA claims, like a previous case
from this District involving alleged unpaid wage claims, both
“involve allegations that [Defendants] were
‘employers' who denied Plaintiff wages and overtime
payment” and the facts in both claims “all stem
from the same time period, the same location, and the same
overall circumstance”; thus, both claims “are
considered to be part of a common nucleus of operative
fact.” Kegun Chen, 2018 U.S. Dist. LEXIS
140925, at *7 (citing Treglia v. Town of Manlius,
313 F.3d 713, 723 (2d Cir. 2002)). Therefore, this Court
concludes that the exercise of supplemental jurisdiction over
Plaintiff's state law claims is appropriate.
Court also finds that it has personal jurisdiction over
Defendants. Corporate Defendants are incorporated in the
State of New York and maintain their principal place of
business in Brooklyn, New York (Compl. ¶¶ 17-20);
therefore, they are subject to the Court's general
jurisdiction. See Daimler AG v. Bauman, 571 U.S.
117, 137 (2014) (noting that the “place of
incorporation and principal place of business are
‘paradigm bases for general jurisdiction'”)
(citations, ellipses, and brackets omitted). Moreover,
Plaintiff demonstrated effective service on Corporate
Defendants via the New York Secretary of State pursuant to
N.Y. Bus. Corp. Law § 306(b)(1). Dkt. Nos. 6-8.
Therefore, this Court has personal jurisdiction over
Corporate Defendants. See Bhagwat v. Queens Carpet Mall,
Inc., No. 14-CV-5474 (ENV) (PK), 2018 U.S. Dist. LEXIS
176986, at *8 (E.D.N.Y. Sept. 12, 2018) (“Personal
jurisdiction over a New York corporation is established once
it is validly served in this district.”) (citing
Fed.R.Civ.P. 4(k)(1)(A), adopted by, 2018 U.S. Dist.
LEXIS 176146 (E.D.N.Y. Oct. 7, 2018)). Individual Defendants
transacted business within the state of New York as owners,
officers and/or agents of Corporate Defendants. Compl.
¶¶ 21-22. In so doing, Defendants
“purposefully availed themselves of the privilege of
conducting activities within the forum State, thus invoking
the benefits and protection of its laws.” Pintor v.
Park King at JFK, LLC, No. 16-CV-6269 (PKC) (PK), 2018
U.S. Dist. LEXIS 28940, at *8 (E.D.N.Y. Feb. 21, 2018)
(quoting Burger King Corp. v. Rudzewicz, 471 U.S.
462, 475 (1985) (other citation omitted)), adopted
by, 2018 U.S. Dist. LEXIS 39352 (E.D.N.Y. Mar. 8, 2018).
Based on Defendants' business activities, “they may
be subject to the Court's specific jurisdiction under New
York's long-arm statute.” Id. (citing N.Y.
C.P.L.R. § 302(a)(1)). Furthermore, Plaintiff
demonstrated effective service on Individual Defendants
pursuant to New York Civil Practice Law and Rules §
308(2). Dkt. Nos. 9-10. Therefore, Individual Defendants are
subject to the Court's specific jurisdiction.
See N.Y. C.P.L.R. § 302(a); Pintor,
2018 U.S. Dist. LEXIS 28940, at *8.
Whether the FLSA Applies to Plaintiff
FLSA governs minimum wages, maximum hours, and other policies
and practices affecting employees and employers. See
Sandifer v. U.S. Steel Corp., 571 U.S. 220, 224 (2014).
Under the FLSA, an “employer” is broadly defined
to include “any person acting directly or indirectly in
the interest of an employer in relation to an
employee.” 29 U.S.C. § 203(d). The statute's
definition of “person” extends to both
individuals and entities. See Id. § 203(a).
Subject to certain statutory exceptions, an
“employee” is defined as “any individual
employed by an employer.” Id. §
203(e)(1). Under the FLSA, an employee may have simultaneous
employers, in which case “all joint employers are
responsible, both individually and jointly, for compliance
with all of the applicable provisions of the [FLSA].”
See Sarikaputar v. Veratip Corp., 371 F.Supp.3d 101,
104 (S.D.N.Y. 2019) (quoting 29 C.F.R. § 791.2(a)).
demonstrate entitlement to the FLSA's wage and overtime
protections, a plaintiff must show: (1) that the defendant
employed plaintiff, and (2) that the employment fell under
the FLSA's individual or enterprise coverage provisions.
See Jacobs v. New York Foundling Hosp., 577 F.3d 93,
96-97 (2d Cir. 2009) (citing Tony & Susan Alamo
Found. v. Sec'y of Labor, 471 U.S. 290, 295 n.8
(1985)); see also 29 U.S.C. § 206(a)(1)
(providing for minimum wage for qualifying employees);
id. § 207(a)(1) (providing for overtime
protection for qualifying employees).
Defendants Constitute Joint Employers
keeping with the FLSA's broad definition of
“employer, ” The Second Circuit has held that
“the determination of whether an employer-employee
relationship exists for purposes of the FLSA should be
grounded in ‘economic reality rather than technical
concepts,' determined by reference not to ‘isolated
factors, but rather upon the circumstances of the whole
activity.'” Barfield v. N.Y.C. Health &
Hosps. Corp., 537 F.3d 132, 141 (2d Cir. 2008) (quoting
Goldberg v. Whitaker House Coop, Inc., 366 U.S. 28,
33 (1961); Rutherford Food Corp. v. McComb, 331 U.S.
722, 730 (1947)). There are “several sets of
factors” that courts in this Circuit apply in assessing
the economic reality of an employment relationship, ranging
from a narrow set of “formal control” factors to
a broad set of “functional control” factors.
Granda v. Trujillo, No. 18-CV-3949 (PAE), 2019 U.S.
Dist. LEXIS 14884, at *10 (S.D.N.Y. Jan. 30, 2019). The
Second Circuit has noted that the purpose of these various
sets of factors is to “ensure that the economic
realities test mandated by the Supreme Court is sufficiently
comprehensive and flexible to give proper effect to the broad
language of the FLSA.” Barfield, 537 F.3d at
143. Thus, satisfaction of the more narrow “formal
control” factors “is sufficient, but not
necessary” to establish employer status. Coley v.
Vannguard Urban Improvement Ass'n, No. 12-CV-5565
(PKC) (RER), 2018 U.S. Dist. LEXIS 54609, at *11 (E.D.N.Y.
Mar. 29, 2018) (citing Zheng v. Liberty Apparel Co.,
355 F.3d 61, 71 (2d Cir. 2003); see also Greenwalt v.
AT&T Mobility LLC, 642 Fed.Appx. 36, 37 (2d Cir.
2016) (“satisfying [the formal control] test is
sufficient, but not necessary, to show joint
“formal control” factors include: “whether
the alleged employer (1) had the power to hire and fire the
employees, (2) supervised and controlled employee work
schedules or conditions of employment, (3) determined the
rate and method of payment, and (4) maintained employment
records.” Carter v. Dutchess Cmty. Coll., 735
F.2d 8, 12 (2d Cir. 1984) (citation omitted). Here,
Plaintiff's allegations closely track the “formal
control” factors. Plaintiff avers that Individual
Defendants “had the power to hire and fire me, control
my terms and conditions of employment, and determine the rate
and method of my compensation.” Baizan Decl. ¶ 5;
see also Compl. ¶ 30. Moreover, Plaintiff
alleges that Individual Defendants established employee
schedules and maintained employee records. Compl.
¶¶ 21-22. Therefore, Plaintiff's allegations
are sufficient to establish that Individual Defendants were
his “employers” within the meaning of the FLSA.
See Thompson v. Hyun Suk Park, No. 18-CV-6 (AMD)
(ST), 2019 U.S. Dist. LEXIS 36111, at *8 (E.D.N.Y. Mar. 5,
2019) (citations omitted) (tracking the “formal
control” factors “has been repeatedly found
sufficient to establish [employer status] at the default
judgment stage”), adopted by, 2019 U.S. Dist.
LEXIS 47176 (E.D.N.Y. Mar. 20, 2019); see also Kliger v.
Liberty Saverite Supermarket Inc., No. 17-CV-2520 (FB)
(ST), 2018 U.S. Dist. LEXIS 159450, at *9-10 (E.D.N.Y. Sept.
17, 2018) (individual defendant constituted employer where
plaintiff alleged that he had sole power to hire and fire
employees, control their schedule and pay, and maintain
employment records) (citing Chuchuca v. Creative Customs
Cabinets Inc., No. 13-CV-2506 (RLM), 2014 U.S. Dist.
LEXIS 164846, at *19-20 (E.D.N.Y. Nov. 25, 2014)),
adopted by, 2018 U.S. Dist. LEXIS 171180 (E.D.N.Y.
Oct. 3, 2018).
Plaintiff's allegations suffice to conclude that
Individual Defendants employed Plaintiff jointly with
Corporate Defendants. Plaintiff alleges that
“Defendants are associated and joint employers, act in
the interest of each other with respect to employees, pay
employees by the same method, and share control over the
employees” (Compl. ¶ 25); that each Defendant
“possessed substantial control over Plaintiff['s] .
. . working conditions, and over the policies and practices
with respect to the employment and compensation of
Plaintiff” (id. ¶ 26); and that
Defendants had the power to hire and fire Plaintiff, control
the terms of his employment, and determine the rate and
method of his compensation (id. ¶ 30). Thus,
the allegations in the Complaint-deemed admitted by
Defendants' default-are sufficient for this Court to
conclude that Defendants jointly employed Plaintiff and that
this employment fell under the FLSA's protections.
See, e.g., Peralta v. M & O Iron Works,
Inc., No. 12-CV-3179 (ARR) (RLM), 2014 U.S. Dist. LEXIS
34592, at *14 (E.D.N.Y. Feb. 19, 2014) (defendants
constituted joint employers where they shared similar control
over plaintiff's employment conditions), adopted
by, 2014 U.S. Dist. LEXIS 32612 (E.D.N.Y. Mar. 11,
Enterprise or Individual Coverage
the FLSA, individual coverage applies where any individual
employee is “engaged in commerce or in the production
of goods for commerce, ” irrespective of his
employer's “enterprise” status.
Jacobs, 577 F.3d at 96 (quoting 29 U.S.C. §
207(a)(1)). Alternatively, any “enterprise engaged in
commerce or in the production of goods for commerce” is
subject to the FLSA under enterprise coverage. 29 U.S.C.
§§ 203(s)(1); 207(a)(1); Jacobs, 577 F.3d
at 96. Enterprise coverage applies when an enterprise:
(1) ‘has employees engaged in commerce or in the
production of goods for commerce,' or ‘has
employees handling, selling, or otherwise working on goods or
materials that have been moved in or produced for commerce by
any person,' and (2) has annual gross volume of sales
made or business done of not less than $500, 000.
Galicia v. 63-68 Diner Corp., No. 13-CV-3689 (PKC),
2015 U.S. Dist. LEXIS 40599, at *5 (E.D.N.Y. Mar. 30, 2015)
(quoting 29 ...