Opinion
20-cv-10518 (JGK)
2022-10-17
Robert BURNS, Plaintiff, v. Gabriel SCOTT, et al., Defendants.
Hui Chen, Law Offices of Hui Chen and Associates, P.C., Flushing, NY, for Plaintiff.
Hui Chen, Law Offices of Hui Chen and Associates, P.C., Flushing, NY, for Plaintiff.
ORDER
JOHN G. KOELTL, District Judge:
The Court has reviewed the Report and Recommendation of Magistrate Judge Cave dated July 29, 2022. The Report recommends that a judgment be entered against defendant Shift Hospitality LLC for $148,608.10 and for attorney's fees in the amount of $3,900.00. See ECF No. 32. No objections have been filed to the Report and Recommendation, and the time for any objections has passed. In any event, the Court finds that the Report and Recommendation is well reasoned and correct. The Court therefore adopts the Report and Recommendation.
The Magistrate Judge has also recommended that the complaint be dismissed against the remaining defendant, Gabriel Scott, for failure to serve the summons and complaint on Scott. The plaintiff has responded that the Scott was served by mail and that proof of service was entered. See ECF No. 37. However, service of the summons and complaint cannot be made simply by mail, and no proof of service was in fact filed according to the docket sheet. Therefore, the case is dismissed without prejudice as to Scott for failure to serve, and the objection is overruled.
CONCLUSION
The Clerk is directed to enter judgment as follows:
(1) In favor of the plaintiff and against the defendant Shift Hospitality, LLC, as follows:
(a) For damages in the amount of $148,608.10; and(b) For attorney's fees in the amount of $3,900; and(c) Post-judgment interest will accrue pursuant to 28 U.S.C. 1961; and
(2) Dismissing the plaintiff's claims against defendant Scott without prejudice.
SO ORDERED.
REPORT AND RECOMMENDATION
SARAH L. CAVE United States Magistrate Judge
TO THE HONORABLE JOHN G. KOELTL, United States District Judge:
I. INTRODUCTION
Plaintiff Robert Burns ("Burns") filed this putative collective action under the Fair Labor Standards Act (the "FLSA"), 29 U.S.C. § 201 et seq., New York Labor Law ("NYLL") §§ 190 et seq. and 650 et seq., and New York's Wage Theft Prevention Act, NYLL § 195 ("WTPA"), and New York common law, seeking payment of unpaid wages and overtime wages and related relief against Defendants Gabriel Scott ("Scott") and Shift Hospitality LLC ("Shift," with Scott, "Defendants"). (ECF No. 1). Burns alleged that, during his employment as Shift's Director of Operations, Defendants failed to pay him the proper weekly, overtime, and spread-of-hours wages, failed to pay him an executive placement fee, and failed to provide required wage notices and statements. (ECF No. 6 ¶¶ 4, 6-7, 25-26, 43-44, 55, 60, 64-65, 69, 73-74).
Burns effected service on Shift, but not on Scott. (See ECF Nos. 8; 15). After Shift failed to appear, the Clerk of the Court entered a certificate of default, and the Honorable John G. Koeltl ordered Shift to show cause why a default judgment should not be entered (the "OTSC"). (ECF Nos. 18; 23). After Shift failed to respond to the OTSC, Judge Koeltl held that Burns was entitled to a default judgment and referred the matter for an inquest on damages. (ECF No. 25).
In response to the Court's orders, Burns submitted proposed findings of fact and conclusions of law (the "Proposed Findings"), supported by his own affidavit (the "Affidavit"), a statement of damages (the "Statement of Damages"), and calculation of attorneys' fees and costs (the "Fee Statement," with the Proposed Findings, Affidavit, and Statement of Damages, the "Damages Submission"). (ECF Nos. 30;
30-1 - 30-3). Despite two warnings, Shift has failed to respond to the Damages Submission. (ECF Nos. 28; 29).
For the following reasons, the Court respectfully recommends that:
(1) Burns be awarded $148,608.10 in damages against Shift, comprised of: (a) $55,145.61 in breach of contract damages; (b) $33,372.00 in unpaid overtime wages; (c) $33,372.00 in liquidated damages; (d) $ 9,500.00 in WTPA damages; and (e) $17,218.49 in pre-judgment interest;
(2) Burns be awarded post-judgment interest pursuant to 28 U.S.C. § 1961;
(3) Burns be awarded attorneys' fees in the amount of $3,900; and
(4) Burns' claims against Scott be DISMISSED without prejudice pursuant to Federal Rules of Civil Procedure 4(m) and 41(b).
II. BACKGROUND
A. Factual Background
Unless otherwise indicated, the Court draws the facts from the Amended Complaint and the Damages Submission. (ECF Nos. 6; 30; 30-1 – 30-3). Given Shift's default, the Court accepts as true all well-pleaded factual allegations in the Amended Complaint, except as to damages. See City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011) ("It is an 'ancient common law axiom' that a defendant who defaults thereby admits all 'well-pleaded' factual allegations contained in the complaint.") (quoting Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 246 (2d Cir. 2004)); Whitehead v. Mix Unit, LLC, No. 17 Civ. 9476 (VSB) (JLC), 2019 WL 384446, at *1 (S.D.N.Y. Jan. 31, 2019).
Defendants own and operate a hospitality business in New York City. (ECF Nos. 6 ¶ 3; 30 ¶ 2). Shift's business model involved taking over or assisting distressed restaurants in exchange for a portion of their profits. (ECF No. 30-1 ¶ 4). Scott was Shift's sole owner and officer. (ECF No. 30-1 ¶ 6). From December 15, 2018 until April 23, 2019, Defendants employed Burns, whose duties as Director of Operations included managerial, sales, and operational tasks. (ECF Nos. 30 ¶ 2; 30-1 ¶¶ 2-3). Burns alleges that his duties "did not fall within any exemptions from overtime under the FLSA and NYLL." (ECF Nos. 6 ¶ 3; 30 ¶ 2). Defendants were Burns' joint employers under 29 U.S.C. § 203(d) and NYLL ¶¶ 190(3) and 651(6), and Burns was Defendants' employee under 29 U.S.C. § 203(e)(1) and NYLL §§ 190(2) and 651(5). (ECF Nos. 6 ¶¶ 14-16; 30 ¶¶ 3-4; 30-1 ¶¶ 2-9). Shift had twelve or more employees during Burns' employment, and annual gross sales greater than $500,000.00. (ECF Nos. 6 ¶ 19; 30-1 ¶ 9).
Each week, Burns worked for Defendants seven days and an average of 70 hours or more. (ECF Nos. 6 ¶¶ 23-25; 30-1 ¶ 8). His weekly pay rate was $2,884.61, regardless of how many hours he worked. (ECF No. 30-1 ¶ 12). Defendants failed to pay Burns full wages for the weeks of 12/18/18, 12/25/18, 1/1/19, 1/8/19, 1/15/19, 1/22/19, 1/29/19, 2/5/19, 2/12/19, 2/19/19, 2/26/19, 3/5/19, 3/12/19, 3/19/19, 3/26/19, 4/1/19, 4/9/19, and 4/16/19, which Burns totals as $35,695.35. (ECF Nos. 6 ¶ 26; 30-1 ¶ 13). In other words, of the $51,922.98 Burns was owed for these weeks, Defendants paid him only $16,227.63. (ECF No. 30-1 ¶ 13).
In addition, Defendants failed to reimburse Burns for bounced checks in the amount of $652.26, and a check return fee of $48. (ECF Nos. 6 ¶ 26; 30 ¶ 8; 30-1 ¶ 14). Defendants also offered to pay recruiting bonuses, i.e., if an employee recruited a new employee for a restaurant and the new employee stayed longer than
30 days, the employee would get a recruitment bonus of 18% of the new employee's salary. (ECF No. 30-1 ¶ 15). Burns attests that, on or about March 1, 2019, he recruited Dana DiSpaltro as a special products manager with a starting salary of $125,000.00, and because Ms. DiSpaltro stayed until at least July 1, 2019, he earned, but Defendants did not pay, a recruiting bonus of $22,500.00 (18% of $125,000.00). (ECF Nos. 30 ¶ 9; 30-1 ¶ 15). Defendants did not pay Burns his spread-of-hours premium, which he calculates as $1,916.00. (ECF Nos. 30 ¶ 10; 30-2 at 2). Defendants did not provide Burns with a wage notice when he was hired, nor did they provide him with wage statements on 18 occasions, as required by the WTPA. (ECF Nos. 6 ¶ 31; 30 ¶¶ 11-12).
B. Procedural Background
On December 12, 2020, Burns filed the Complaint, and on December 14, 2020, filed the Amended Complaint, asserting claims for unpaid overtime under the FLSA and the NYLL (Counts I and II), spread-of-hours pay under the NYLL (Count III), violations of the WTPA (Counts IV and V), and breach of contract for failure to pay the recruiting fee (Count VI). (ECF Nos. 1; 6). On March 8, 2021, Burns effected service on Shift. (ECF No. 8). On August 9, 2021, Judge Koeltl denied Burns' request for leave to serve Scott by publication, but granted him an additional 45 days to effect service on Scott, and directed Burns to seek a certificate of default as to Shift and move for default judgment by order to show cause by September 10, 2021. (ECF No. 15 (the "Aug. 9 Order")). On September 9, 2021, the Clerk of the Court entered a Certificate of Default against Shift. (ECF No. 18). On September 10, 2021, Burns filed a proposed order to show cause seeking a default judgment as to Shift. (ECF Nos. 20-22 (the "Proposed OTSC Submission")). The docket contains no indication that Burns ever served Scott.
On September 13, 2021, Judge Koeltl ordered Shift to show cause by September 27, 2021 why an order should not be issued pursuant to Fed. R. Civ. P. 54(b) and 55 entering a default judgment as to liability. (ECF No. 23 (the "OTSC")). On September 17, 2021, Burns served the OTSC and the Proposed OTSC Submission on Shift. (ECF No. 24). On October 12, 2021, after Shift failed to respond to the OTSC, Judge Koeltl issued an order finding that Burns is entitled to a default judgment, and referring the matter for an inquest on damages. (ECF No. 25 (the "Default Judgment Order")).
On October 14, 2021, the Court directed Burns to submit proposed findings of fact and conclusions of law concerning damages by November 12, 2021, and Shift to respond by December 3, 2021. (ECF No. 27 (the "First Scheduling Order")). The First Scheduling Order warned Shift that if it failed to respond to Burns' submissions or contact the Court to request an in-person hearing, the Court would issue a report and recommendation based on Burns' submissions alone. (Id. at 1-2). On November 17, 2021, after Burns failed to comply with the First Scheduling Order, the Court sua sponte extended the deadline for him to file the materials necessary to determine damages to November 24, 2021, and Shift's deadline to respond to December 15, 2021, with the same warnings to Shift should it fail to respond. (ECF No. 28 (the "Second Scheduling Order")). On November 23, 2021, Burns served the Second Scheduling Order on Shift. (ECF No. 29).
On November 24, 2021, Burns filed the Damages Statement. (ECF Nos. 30; 30-1 — 30-3). On July 7, 2022, the Court ordered Burns to submit by July 15, 2022 proof of the "contract" pursuant to which, he alleged,
Shift was obligated to pay him a placement fee and wages, as well as a list of the dates on which he worked more than ten (10) hours for purposes of calculating spread-of-hours damages. (ECF No. 31 (citing ECF Nos. 6 ¶ 73; 30-1 ¶ 15; 30-2 at 2) (the "Supplemental Order")). In the Supplemental Order, the Court granted Shift until July 22, 2022 to respond to any supplemental submission by Burns. (Id.)
Burns has not responded to the Supplemental Order, and Shift has neither responded to any of the Court's orders nor contacted the Court to request an in-person hearing. Accordingly, the Court shall conduct the inquest based on Burns' Damages Submission alone.
III. LEGAL STANDARDS
A. Obtaining a Default Judgment
A party seeking a default judgment must follow the two-step procedure set forth in Federal Rule of Civil Procedure 55. See Bricklayers & Allied Craftworkers Loc. 2 v. Moulton Masonry & Constr., LLC, 779 F.3d 182, 186-87 (2d Cir. 2015); Fed. R. Civ. P. 55. First, under Rule 55(a), where a party has failed to plead or otherwise defend in an action, the Clerk of the Court must enter a certificate of default. See Fed. R. Civ. P. 55(a). Second, after entry of the default, if the party still fails to appear or move to set aside the default, the Court may enter a default judgment. See Fed. R. Civ. P. 55(b). Whether to enter a default judgment lies in the "sound discretion" of the trial court. Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993). Because a default judgment is an "extreme sanction" that courts are to use as a tool of last resort, Meehan v. Snow, 652 F.2d 274, 277 (2d Cir. 1981), the district court must "carefully balance the concern of expeditiously adjudicating cases, on the one hand, against the responsibility of giving litigants a chance to be heard, on the other." Fermin v. Las Delicias Peruanas Rest., Inc., 93 F. Supp. 3d 19, 29 (E.D.N.Y. Mar. 19, 2015) (citing Enron, 10 F.3d at 96).
In considering whether to enter a default judgment, district courts are "guided by the same factors [that] apply to a motion to set aside entry of a default." First Mercury Ins. Co. v. Schnabel Roofing of Long Is., Inc., No. 10 Civ. 4398 (JS) (AKT), 2011 WL 883757, at *1 (E.D.N.Y. Mar. 11, 2011). "These factors include: (1) whether the default was willful; (2) whether ignoring the default would prejudice the opposing party; and (3) whether the defaulting party has presented a meritorious defense." J & J Sports Prods. Inc. v. 1400 Forest Ave. Rest. Corp., No. 13 Civ. 4299 (FB) (VMS), 2014 WL 4467774, at *4 (E.D.N.Y. Sept. 10, 2014) (citing Swarna v. Al-awadi, 622 F.3d 123, 142 (2d Cir. 2010)); see Enron, 10 F.3d at 96 (noting that "[a]lthough the factors examined in deciding whether to set aside a default or a default judgment are the same, courts apply the factors more rigorously in the case of a default judgment because the concepts of finality and litigation repose are more deeply implicated in the latter action") (internal citation omitted).
B. Determining Liability
A defendant's default is deemed "a concession of all well-pleaded allegations of liability," Rovio Entm't, Ltd. v. Allstar Vending, Inc., 97 F. Supp. 3d 536, 545 (S.D.N.Y. 2015), but a default "only establishes a defendant's liability if those allegations are sufficient to state a cause of action against the defendants." Gesualdi v. Quadrozzi Equip. Leasing Corp., 629 F. App'x 111, 113 (2d Cir. 2015). The Court must determine "whether the allegations in [the] complaint establish the defendants' liability as a matter of law." Id. If the
Court finds that the well-pleaded allegations establish liability, the Court then analyzes "whether plaintiff has provided adequate support for [his requested] relief." Gucci Am., Inc. v. Tyrrell-Miller, 678 F. Supp. 2d 117, 119 (S.D.N.Y. 2008). If, however, the Court finds that the complaint fails to state a claim on which relief may be granted, the Court may not award damages, "even if the post-default inquest submissions supply the missing information." Perez v. 50 Food Corp., No. 17 Civ. 7837 (AT) (BCM), 2019 WL 7403983, at *4 (S.D.N.Y. Dec. 4, 2019), adopted by, 2020 WL 30344 (S.D.N.Y. Jan. 2, 2020).
C. Determining Damages
Once liability has been established, the Court must "conduct an inquiry in order to ascertain the amount of damages with reasonable certainty." Am. Jewish Comm. v. Berman, No. 15 Civ. 5983 (LAK) (JLC), 2016 WL 3365313, at *3 (S.D.N.Y. June 15, 2016) (citation omitted), adopted by, 2016 WL 4532201 (S.D.N.Y. Aug. 29, 2016). A plaintiff "bears the burden of establishing [its] entitlement to recovery and thus must substantiate [its] claim with evidence to prove the extent of damages." Dunn v. Advanced Credit Recovery Inc., No. 11 Civ. 4023 (PAE) (JLC), 2012 WL 676350, at *2 (S.D.N.Y. Mar. 1, 2012). The evidence the plaintiff submits must be admissible. Poulos v. City of New York, No. 14 Civ. 3023 (LTS) (BCM), 2018 WL 3750508, at *2 (S.D.N.Y. July 13, 2018), adopted by, 2018 WL 3745661 (S.D.N.Y. Aug. 6, 2018); see House v. Kent Worldwide Mach. Works, Inc., 359 F. App'x 206, 207 (2d Cir. 2010) (summary order) ("[D]amages must be based on admissible evidence."). If the documents the plaintiff has submitted provide a "sufficient basis from which to evaluate the fairness of" the requested damages, the Court need not conduct an evidentiary hearing. Fustok v. ContiCommodity Servs. Inc., 873 F.2d 38, 40 (2d Cir. 1989); see Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (noting that a court may determine appropriate damages based on affidavits and documentary evidence "as long as [the court has] ensured that there [is] a basis for the damages specified in the default judgment") (internal citation omitted).
When the employer's payroll records are inaccurate or incomplete, "an employee has carried out his burden if he proves" enough for the court to make a "inference" that he "has in fact performed work for which he was improperly compensated and if he produces sufficient evidence to show the amount and extent of that work[.]" Kuebel v. Black & Decker Inc., 643 F.3d 352, 362 (2d Cir. 2011) (citation omitted). The Court may credit a plaintiff's "recollections regarding [her] hours and pay in conducting [the] inquest." Coley v. Vannguard Urban Improvement Ass'n, Inc., No. 12 Civ. 5565 (PKC) (RER), 2018 WL 1513628, at *7 (E.D.N.Y. Mar. 27, 2018), as amended Mar. 29, 2018. The Court "must ensure that [his] approximations and estimates are reasonable and appropriate." Id. Ultimately, the default judgment the Court enters "must not differ in kind from, or exceed in amount, what is demanded in the pleadings." Fed. R. Civ. P. 54(c); see Silge v. Merz, 510 F.3d 157, 160 (2d Cir. 2007) (limiting damages to those specified in demand in complaint "ensures that a defendant who is considering default can look at the damages clause, satisfy himself that he is willing to suffer judgment in that amount, and then default without the need to hire a lawyer"); Joint Stock Co. Channel One Russia Worldwide v. Infomir LLC, No. 16 Civ. 1318 (GBD) (BCM), 2018 WL 4760345, at *1 (S.D.N.Y. Sept. 28, 2018) (holding that plaintiff could not recover damages
for unalleged claims against defaulted defendant).
IV. DISCUSSION
A. Default Judgment
In accordance with the two-step process set forth in Rule 55, the Clerk of the Court entered the Certificate of Default as to Shift, and Judge Koeltl entered the Default Judgment Order. (ECF Nos. 18; 25). The Court's analysis of the relevant factors set forth above reveals first, that the Court can infer from Shift's failure to submit any written reply to Burns' Damages Submission, after having been properly served, that its default was willful. (ECF Nos. 8; 24; 29). See Indymac Bank, F.S.B. v. Nat'l Settlement Agency, Inc., No. 07 Civ. 6865 (LTS) (GWG), 2007 WL 4468652, at *1 (S.D.N.Y. Dec. 20, 2007) (finding that a failure to respond to a complaint and subsequent motion for default judgment "indicate[s] willful conduct"). Second, delaying entry of a default judgment might prejudice Burns. See Inga v. Nesama Food Corp., No. 20 Civ. 909 (ALC) (SLC), 2021 WL 3624666, at *6 (S.D.N.Y. July 30, 2021) (finding that FLSA plaintiff would "be prejudiced in the absence of a default judgment, not only by the delay in resolving this action, but by his inability to recover from another source for the lost wages and other losses he sustained while working for Defendants"), adopted by, 2021 WL 3617191 (S.D.N.Y. Aug. 16, 2021). Third, Shift has presented no defense whatsoever. Thus, because the requirements of Rule 55 are satisfied and the relevant factors weigh in Burns' favor, the Court finds that entry of default judgment is proper in this case.
B. Liability
1. Jurisdiction and Venue
As a threshold matter, this Court has subject matter jurisdiction over this action. Burns sues under a federal statute—the FLSA—that gives rise to the Court's subject matter jurisdiction under 28 U.S.C. § 1331. The Court may exercise supplemental jurisdiction over his NYLL and New York common law claims because they arise out of the same facts and circumstances as his FLSA claims. See Perez, 2019 WL 7403983, at *4.
The Court also has personal jurisdiction over Shift. Personal jurisdiction is "a necessary prerequisite to entry of a default judgment." Reilly v. Plot Commerce, No. 15 Civ. 05118 (PAE) (BCM), 2016 WL 6837895, at *2 (S.D.N.Y. Oct. 31, 2016) (citation omitted), adopted by, 2016 WL 5107058 (E.D.N.Y. Sept. 19, 2016). Shift is located and operates its hospitality business in Manhattan, (ECF No. 6 ¶¶ 3, 11), and Burns served Shift with the Summons and Amended Complaint. (ECF No. 8).
The Court does not have personal jurisdiction over Scott. Despite receiving an extension of time to serve Scott, (ECF No. 15), the record reflects that Burns never effected service on Scott. Accordingly, the Court respectfully recommends that Burns' claims against Scott be dismissed without prejudice pursuant to Federal Rules of Civil Procedure 4(m) and 41(b). See Suriel v. Cruz, No. 20 Civ. 8442 (VSB) (SLC), 2022 WL 1750232, at *1 n.1 (S.D.N.Y. Jan. 10, 2022), adopted by, 2022 WL 1751163 (S.D.N.Y. May 31, 2022) (dismissing without prejudice claims against un-served defendants pursuant to Fed. R. Civ. P. 4(m) and 41(b)).
Venue is proper because Shift maintains its principal address and operates its business in this District (ECF No. 6 ¶¶ 3, 11), see 28 U.S.C. § 1391(b)(1), and because the events or omissions giving rise to Burns' claims occurred in this District. (ECF No. 6). See 28 U.S.C. § 1391(b)(2). 2. Statute of Limitations
Under the NYLL, the statute of limitations is six years. See NYLL § 198(3). Under the FLSA, the statute of limitations is two years, or, if the violations were "willful," three years. See 29 U.S.C. § 255(a); see also McLaughlin v. Richland Shoe Co., 486 U.S. 128, 129, 108 S.Ct. 1677, 100 L.Ed.2d 115 (1988). A violation of the FLSA is willful if "the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited." McLaughlin, 486 U.S. at 133, 108 S.Ct. 1677. Although plaintiffs may not recover under both the FLSA and the NYLL for the same injury, courts allow plaintiffs to recover under the statute that provides for the greatest relief. Ni v. Bat-Yam Food Servs. Inc., No. 13 Civ. 7274 (ALC) (JCF), 2016 WL 369681, at *1 (S.D.N.Y. Jan. 27, 2016).
Here, Burns worked at Shift from December 15, 2018 to April 23, 2019, (ECF No. 30-1 ¶ 2), and filed the original Complaint on December 12, 2020. (ECF No. 1). Thus, Burns' employment period is entirely within both the NYLL and the FLSA statutes of limitations. Nevertheless, because the NYLL provides for equal or greater relief relative to the FLSA, the Court recommends awarding Burns damages under the NYLL. See Schalaudek v. Chateau 20th St. LLC, No. 16 Civ. 11 (WHP) (JLC), 2017 WL 729544, at * 5 (S.D.N.Y. Feb. 24, 2017).
3. FLSA and NYLL Elements
To state a claim for wages under the FLSA, a plaintiff must allege that: (1) he was the defendant's employee; (2) his work involved interstate activity; and (3) he worked for hours for which he did not receive minimum or overtime wages. See Tackie v. Keff Enter., Inc., No. 14 Civ. 2074 (JPO), 2014 WL 4626229, at *2 (S.D.N.Y. Sept. 16, 2014). A wage-and-hour claim under the NYLL involves a similar analysis, "except that the NYLL does not require plaintiffs to show a nexus with interstate commerce or a minimum amount of annual sales." Id. at *2 n.2. To recover overtime compensation, a plaintiff "must allege sufficient factual matter to state a plausible claim that [he] worked compensable overtime in a workweek longer than 40 hours." Lundy v. Catholic Health Sys. of Long Island Inc., 711 F.3d 106, 114 (2d Cir. 2013). To recover spread-of-hours pay, he must also allege that he worked "more than ten hours per day ... and [was] not paid an additional hour at the minimum wage rate for days in which [she] worked [ten] or more hours." Rodriguez v. Almighty Cleaning, Inc., 784 F. Supp. 2d 114, 123 (E.D.N.Y. 2011).
a. The employment relationship
Under the FLSA, an "employer" is "any person acting directly or indirectly in the interest of an employer in relation to an employee." 29 U.S.C. § 203(d). Courts afford the term employer "an expansive definition with 'striking breadth.'" Mondragon v. Keff, No. 15 Civ. 2529 (JPO) (BCM), 2019 WL 2551536, at *7 (S.D.N.Y. May 31, 2019), adopted by, 2019 WL 2544666 (S.D.N.Y. June 20, 2019) (quoting Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 326, 112 S.Ct. 1344, 117 L.Ed.2d 581 (1992)). Under the FLSA, "[a]n individual may have multiple 'employers,'" such that "'all joint employers are responsible, both individually and jointly, for compliance with all of the applicable provisions of the [FLSA].'" Martin v. Sprint United Mgmt. Co., 273 F. Supp. 3d 404, 421 (S.D.N.Y. 2017) (quoting 29 C.F.R. § 791.2(a)).
To determine whether Shift was Burns' employer for FLSA purposes, the Court must examine the "economic reality" of the working relationship. Irizarry v. Catsimatidis, 722 F.3d 99, 104 (2d Cir.
2013). Courts in the Second Circuit consider four non-exclusive factors to assess the "economic reality" of an alleged employment relationship, including "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." Id. at 105 (quoting Barfield v. N.Y.C. Health & Hosps. Corp., 537 F.3d 132, 142 (2d Cir. 2008)). This "inquiry is a totality-of-the-circumstances approach, so no one factor is dispositive[.]" Tackie, 2014 WL 4626229, at *2.
Under the NYLL, the definition of "employer" is also broad, see NYLL § 190(3), "and the crucial inquiry, in determining whether an employer-employee relationship exists, is the 'degree of control exercised by the purported employer over the results produced or the means used to achieve the results.'" Mondragon, 2019 WL 2551536, at *7 (quoting Hart v. Rick's Cabaret Int'l, Inc., 967 F. Supp. 2d 901, 923 (S.D.N.Y. 2013)). In the absence of a decision from the New York Court of Appeals answering "the question whether the test for 'employer' status is the same under the FLSA and the NYLL," Camara v. Kenner, No. 16 Civ. 7078 (JGK), 2018 WL 1596195, at *7 (S.D.N.Y. Mar. 29, 2018), "[t]here is general support for giving FLSA and the [NYLL] consistent interpretations... [a]nd there appears to have never been a case in which a worker was held to be an employee for purposes of the FLSA but not the NYLL (or vice versa)." Hart, 967 F. Supp. 2d at 924 (internal citation omitted). "Accordingly, courts in this District regularly apply the same tests to determine whether entities were joint employers under NYLL and the FLSA." Martin, 273 F. Supp. 3d at 422.
NYLL § 190(3) defines "employer" as "any person, corporation, limited liability company, or association employing any individual in any occupation, industry, trade, business or service."
Burns alleges that Shift employed him as the Director of Operations in their hospitality business, and that his duties "did not fall within any exemptions from overtime under the FLSA and NYLL." (ECF Nos. 6 ¶¶ 3, 14-16, 21-22; 30-1 ¶¶ 2-3). By its default, Shift has admitted its status as Burns' employer. See Suriel, 2022 WL 1750232, at *11; Rovio Entm't, 97 F. Supp. 3d at 545. Because Shift was Burns' employer, it is jointly and severally liable under the FLSA and NYLL for any damages award. See Fermin, 93 F. Supp. 3d at 37 (imposing joint and several liability on defaulting corporate and individual defendants); Pineda v. Masonry Const., Inc., 831 F. Supp. 2d 666, 685 (S.D.N.Y. 2011) (imposing joint and several liability on defaulting corporate and individual defendants where allegations that individual defendant "was an owner, partner, or manager," along with his default, established him as employer under the FLSA and the NYLL). b. Interstate commerce
The Court notes that, even when an employment relationship meets the FLSA's and NYLL's definitions, "Section 13 of the FLSA contains a litany of exemptions to the minimum wage requirement[,]" Chen v. Major League Baseball, 6 F. Supp. 3d 449, 454 (S.D.N.Y. 2014) ("Chen I "), aff'd sub nom. Chen v. Major League Baseball Properties, Inc., 798 F.3d 72 (2d Cir. 2015) ("Chen II"), including for "any employee employed in a bona fide executive, administrative or professional capacity[.]" 29 U.S.C. § 213(a)(1). The NYLL contains similar exemptions. See NYLL § 651(5)(b). "These exemptions are affirmative defenses, for which employers have the burden of proof." Chen I, 6 F. Supp. 3d at 454. "A plaintiff is not required to plead the absence of such a defense." Chen II, 798 F.3d at 81. "As Defendants have failed to appear in this action, the affirmative defense of exemption has not been raised." Reyes v. Art Tek Design, Ltd., No. 16CV5168ADSAYS, 2018 WL 614980, at *4 (E.D.N.Y. Jan. 11, 2018), adopted by, 2018 WL 611733 (E.D.N.Y. Jan. 29, 2018). "Accordingly, the Court finds no basis for finding [Burns'] employment with [Shift] to be exempt from the FLSA's [or NYLL's] provisions." Id.
Under the FLSA, Burns must establish that he or his employer was engaged in interstate commerce. See Ethelberth v. Choice Sec. Co., 91 F. Supp. 3d 339, 353 (E.D.N.Y. 2015) ("Engagement in interstate commerce, either by an employee or by the employer as a whole, is a prerequisite for liability for the FLSA's overtime requirement."); 29 U.S.C. § 207(a)(1) (stating that employees "engaged in commerce or in the production of goods for commerce" are entitled to overtime compensation at "one and one-half times the regular rate at which [they are] employed"); 29 U.S.C. § 203(s)(1)(A) (defining "Enterprise engaged in commerce...").
Burns has plausibly alleged that Shift was engaged in interstate commerce. Burns alleged that Shift had employees "who negotiate, market and provide goods and/or services to local, out of state and international customers for monetary compensation thus operating and engaging in interstate commerce." (ECF No. 6 ¶ 22). Burns also alleges that Shift marketed, advertised, and conducted sales "through the internet, which is a global communications and sales medium[,]" and that its employees "regularly use wire and electronic means of communicating interstate and processing transactions interstate and/or internationally" as well as "websites, signage, computers, telephones, equipment and other tools or items that have moved in interstate commerce." (Id.). Burns also alleges that Shift's "annual gross sales were in excess of $500,000[.]" (Id. ¶ 19). Finally, Shift maintains an office in Manhattan (ECF No. 6 ¶ 11), and "local business activities fall within the reach of the FLSA when an enterprise employs workers who handle goods or materials that have moved or been produced in interstate commerce." Cabrera v. Canela, 412 F. Supp. 3d 167, 173 (E.D.N.Y. 2019) (quoting Archie v. Grand Cent. P'ship, Inc., 997 F. Supp. 504, 530 (S.D.N.Y. 1998)). The Court finds that Burns' allegations meet the threshold for enterprise liability under § 203(s)(1)(A) of the FLSA, and therefore, Burns has satisfied the interstate commerce element for FLSA liability. See Mondragon, 2019 WL 2551536, at *9.
c. Unpaid overtime
Both the FLSA and the NYLL require an employer to pay an overtime rate of one and one-half times the employee's "regular rate" of pay. 29 U.S.C. § 207(a)(1); 12 N.Y.C.R.R. § 142-2.2. To state an overtime claim, a plaintiff "must allege only that she worked compensable overtime in a workweek longer than forty hours, and that she was not properly compensated for that overtime." Tackie, 2014 WL 4626229, at *3.
Burns claims that he worked Monday to Friday from 7:30 a.m. to 9:00 p.m., and 10:00 a.m. to 8:00 p.m. or 9:00 p.m. on "Saturday and/or Sunday," totaling "over 70 hours" per week. (ECF Nos. 6 ¶¶ 23-25; 30-1 ¶ 8). Burns alleges that Shift failed to pay him required overtime compensation for hours he worked over 40 hours per week. (ECF Nos. 6 ¶¶ 43-44, 53, 55; 30-1 ¶ 12). Thus, Burns has adequately stated a claim for unpaid wages under the FLSA and the NYLL. See Agureyev v. H.K. Second Ave. Restaurant, Inc., 2021 WL 847977, at *7 (S.D.N.Y. March 5, 2021) (holding that plaintiff stated claim for
overtime wages); Mondragon, 2019 WL 2551536, at *9 (same).
d. Spread-of-hours pay
Under the NYLL, employers must pay a covered employee one extra hour of compensation, at the basic minimum wage rate, for each day on which he worked more than ten hours. 12 N.Y.C.R.R. § 142-2.4(a). Spread of hours is defined as "the interval between the beginning and end of an employee's workday" and "includes working time plus time off for meals plus intervals off duty." Id. § 142-2.18. "[T]he spread of hours regulations 'apply to all employees in restaurants... regardless of a given employee's regular rate of pay.'" Andrade v. 168 First Ave. Rest. Ltd., No. 14 Civ. 8268 (JPO) (AJP), 2016 WL 3141567, at *4 (S.D.N.Y. June 3, 2016). An employee may recover spread-of-hours wages in addition to federal and state overtime wages. See Doo Nam Yang v. ACBL Corp., 427 F. Supp. 2d 327, 339-41 (S.D.N.Y. 2005).
Burns alleged in the Amended Complaint that he worked shifts longer than ten hours. (ECF Nos. 6 ¶¶ 23-24). In his Affidavit, Burns attests only that he "worked seven days a week and on average [he] worked seventy (70) hours a week or more." (ECF No. 30-1 ¶ 8). The Damages Statement calculates that he is entitled to spread-of-hours damages for 17 days in 2018, and 113 days in 2019. (ECF No. 30-2 at 2). In the Supplemental Order, the Court directed Burns to submit "a supplemental affidavit or other proof evidencing the dates on which he worked more than ten (10) hours[.]" (ECF No. 31 at 1-2). Burns has not done so. To assess liability for spread-of-hours damages, the Court has only the unsworn Damages Statement and his Affidavit, both of which lack any detail as to the dates on which Burns worked more than ten hours. His statement that 70 hours was his weekly "average" implies that some weeks were more, and some weeks were less, but still does not tell the Court on which dates he worked more than ten hours. (ECF No. 30-1 ¶ 8). Accordingly, the Court finds that Burns has failed to provide a sufficient basis to recover spread-of-hours damages. See Suriel, 2022 WL 1750232, at *14 (recommending denial of spread-of-hours damages where plaintiff alleged only that she "often worked shifts longer than ten [] hours" and failed to specify when she did so), adopted by, 2022 WL 1751163 (S.D.N.Y. May 31, 2022); see Inga, 2021 WL 3624666, at *10 (same).
e. Statutory wage notices and statements
"The [WTPA], which became effective April 9, 2011, required [Shift] to provide [Burns], at the time of hiring, with a notice containing, inter alia, the rate and frequency of [his] pay, NYLL § 195(1), and to furnish [him] with a written statement with each payment of wages, listing, inter alia, the dates covered by the payment, the regular rate of pay, the overtime rate, and the number of hours worked." Mondragon, 2019 WL 2551536, at *12 (citing NYLL § 195(3)).
Burns alleges that Shift failed to provide him with a wage notice at the time of his hiring, and failed to furnish 18 weekly wage statements, such that he is entitled to statutory penalties. (ECF Nos. 6 ¶¶ 7, 31, 63-65; 30-2 at 3). Accordingly, Burns is entitled to recover statutory damages under §§ 195(1) and 195(3). See Suriel, 2022 WL 1750232, at *14.
4. Breach of Contract Claim
To state a claim for breach of contract under New York law, a plaintiff must allege four elements: "(1) the existence of a contract; (2) the performance of that contract by one party; (3) the breach of that contract by the other party; and (4)
damages." LG Cap. Funding, LLC v. Energy Edge Techs. Corp., No. 17 Civ. 9021 (AKH), 2018 WL 4278344, at *1 (S.D.N.Y. Aug. 28, 2018); see Lenard v. Design Studio, 889 F. Supp. 2d 518, 528 (S.D.N.Y. 2012) (same).
In support of his breach of contract claim in the Amended Complaint, Burns alleges that:
The parties entered into a contract. Pursuant to the agreement, Defendants agreed to pay plaintiff a placement fee and wages. Defendants failed to pay Plaintiff on demand for payment as detailed herein in breach of the agreement.
(ECF No. 6 ¶ 73). Burns alleged that, as a result of Defendants' breach, he is "entitled to breach of contract damages in the amount to be determined at trial." (ECF No. 6 ¶ 74). In his Affidavit, he makes no reference to any contract with Defendants, let alone details about the date the alleged contract was entered, its scope, or its terms. (ECF No. 30-1). In the Supplemental Order, the Court directed Burns to provide a copy of the "contract," but he has not done so. (ECF No. 31 at 1).
Despite this dearth of detail, the Court is, however, "mindful that 'a default is an admission of all well-pleaded allegations against the defaulting party.'" LG Cap. Funding, 2018 WL 4278344, at *1 (quoting Vt. Teddy Bear Co., 373 F.3d at 246). After reviewing the Amended Complaint, the Court finds that Burns has adequately pleaded each element of a breach of contract claim: that he and Shift had a contract pursuant to which Shift was to pay him weekly wages and a placement fee, and that Shift failed to do so after he recruited DiSpaltro, resulting in damages to Burns, to be calculated below. See Sudul v. Comput. Outsourcing Servs., 868 F. Supp. 59, 61 (S.D.N.Y. 1994).
C. Damages Calculations
No party has requested a hearing on the issue of damages, and Shift has not submitted any written materials. Therefore, the Court has conducted its inquest based solely on the materials in Burns' Damages Submission. See Cement & Concrete Workers Dist. Council Welfare Fund v. Metro Found. Contractors, Inc., 699 F.3d 230, 234 (2d Cir. 2012) ("[A] district court may determine there is sufficient evidence either based upon evidence presented at a hearing or upon a review of detailed affidavits and documentary evidence."); Perez, 2019 WL 7403983, at *3; Fed. R. Civ. P. 55(b)(2).
1. Evidentiary Basis
The Court must determine whether Burns has provided sufficient evidence to support his claim for damages. Transatlantic Marine, 109 F.3d at 111; Bleecker v. Zetian Sys., Inc., No. 12 Civ. 2151 (DLC), 2013 WL 5951162, at *6 (S.D.N.Y. Nov. 1, 2013). In his Damages Submission, Burns filed his Affidavit attesting to the dates and circumstances of his employment. (ECF No. 30-1). Despite two warnings (see ECF Nos. 28; 29), Shift has not responded to the Default Order or the Damages Submission or provided any contrary evidence. The Court finds that Burns has met his evidentiary burden of proving damages, to the extent the Court has found Shift liable above (see § IV.B, supra), and that an in-person hearing is unnecessary because his submission, combined with Shift's admissions resulting from its default, constitutes a sufficient basis from which to evaluate the fairness of his damages request. Fustok, 873 F.2d at 40; see Boston Sci. Corp. v. N.Y. Ctr. for Specialty Surgery, No. 14 Civ. 6170 (RRM), 2015 WL 13227994, at *3 (E.D.N.Y. Aug. 31, 2015) (same).
2. Wages
Burns alleges that Defendants failed to pay him "wages in full for the
weeks of 12/18/18, 12/25/18, 1/1/19, 1/8/19, 1/15/19, 1/22/19, 1/29/19, 2/5/19, 2/12/19, 2/19/19, 2/26/19, 3/5/19, 3/12/19, 3/19/19, 3/26/19, 4/1/19, 4/9/19, and 4/16/19, for total unpaid wages of $35,695.35." (ECF No. 30-1 ¶ 13; see ECF No. 6 ¶ 26). His weekly salary was $2,884.61, entitling him to $51,922.98 for the 18-week period of 40-hour weeks, but Defendants paid him only sporadically—$5,409.21 on 1/10/19, $1,803.07 on 1/23/19, $3,606.14 on 2/11/19, and $1,803.07 on 2/26/19, 3/7/19 and 4/12/19—totaling $16,227.63. (ECF No. 30-1 ¶¶ 12, 13). Burns' hourly rate of $72.12 ($2,884.61/40 hours) exceeds the New York State minimum wage rate during the period of his employment, and therefore he does not have a basis (nor does he seek (see ECF No. 6)) to recover under the FLSA or the NYLL for these unpaid wages. Accordingly, the only basis for recovery of wages is Burns' breach of contract claim.
The New York State minimum wage rate from December 15, 2018 until December 31, 2018 was $13.00 per hour and from December 31, 2018 until the end of his employment was $15.00 per hour. See NYLL § 652(1)(a).
"'The general rule for measuring damages for breach of contract ... is the amount necessary to put the plaintiff in the same economic position he would have been in had the [d]efendant fulfilled his contract.'" Asesoral Bus. Ptrs., LLC v. Seatech Worldwide Corp., No. 19 Civ. 11512 (AJN) (SLC), 2021 WL 6755016, at *5 (S.D.N.Y. Dec. 16, 2021) (quoting Bos. Sci. Corp., 2015 WL 13227994, at *3), adopted by 2022 WL 1265945 (S.D.N.Y Apr. 28, 2022). Under New York law, "[t]he damages an employee is entitled to recover for breach of an employment agreement are the amount of wages and other benefits he[] would have received under the contract." Siegel v. Laric Enter. Corp., 307 A.D.2d 861, 862, 763 N.Y.S.2d 607 (1st Dep't 2003). While Burns was "'required to mitigate damages upon breach, the burden of proving a lack of diligent effort to mitigate damages is upon the defendant[,]'" which Shift, by defaulting, has failed to do. Wilkinson v. R. MacDonald Elec., Inc., No. 03-CV-6441, 2006 WL 8456460, at *2 (W.D.N.Y. July 10, 2006) (quoting Cornell v. T.V. Dev. Corp., 17 N.Y.2d 69, 74, 268 N.Y.S.2d 29, 215 N.E.2d 349 (1966)).
The Court finds that, under the contract as alleged in the Amended Complaint, Burns' damages for Shift's breach consist of the "current compensation level" he was to be paid—$2,884.61 per week—for the 18-week term of his employment ($51,922.98), less the amount he was actually paid ($16,227.63), which equates to $35,695.35. (ECF Nos. 6 ¶ 26; 30-1 ¶¶ 12-13). Wilkinson, 2006 WL 8456460, at *2. The Court also finds that the amounts he incurred for a bounced check and associated return fee ($652.26 and $48, respectively) (ECF Nos. 6 ¶ 26; 30-1 ¶ 14), are sufficiently incidental to his wage damages as to warrant inclusion of this additional $700.26 in the calculation of his breach of contract damages.
The remaining question is the "placement fee." In the Amended Complaint, Burns alleges that he "was not paid his executive placement fee in the amount of $18,750." (ECF No. 6 ¶ 26). Shift is deemed to have admitted this allegation by its default. (See §§ II.A, IV.B.4, supra). In his Affidavit, however, Burns claims that the salary of Ms. DiSpaltro, the employee whom he recruited, was $125,000, 18% of which is $22,500. (ECF No. 30-1 ¶ 15). Burns does not explain this discrepancy, nor, as noted above, has he responded to the Supplemental Order. Accordingly, the Court finds that Burns has not met his evidentiary burden of demonstrating his
entitlement to the higher amount, and, accordingly, recommends that he be awarded $18,750, the amount Shift has been deemed to admit by its default.
In sum, the Court respectfully recommends that Burns be awarded breach of contract damages in the amount of $55,145.61 ($35,695.35 + $700.26 + $18,750).
3. Overtime wages
The Court calculates appropriate overtime wages "by multiplying [an employee's] regular hourly rate (or the minimum wage rate, if his regular hourly rate falls below the minimum wage) by one and one-half[,]" then multiplying that rate "by the number of hours in excess of forty hours the employee worked each week." Rosendo v. Everbrighten Inc., No. 13 Civ. 7256 (JGK) (FM), 2015 WL 1600057, at *4 (S.D.N.Y. Apr. 7, 2015), adopted by 2015 WL 4557147 (S.D.N.Y. July 28, 2018).
In the Damages Statement, Burns calculates his regular hourly rate as $41.20 ($2,884.61/70 hours), and requests a total of $11,124.00 in overtime damages. (ECF No. 30-2 at 1-2). Having reviewed the Damages Submission, the Court disagrees with Burns' calculation of the overtime wages he is owed, because he appears to have calculated the overtime rate by multiplying his regular rate by one-half, rather than by one and one-half. The Court instead recommends that Burns be awarded overtime damages in the amount below:
Burns calculates the overtime premium shortfall as $618 per week (30 overtime hours * $20.6 per hour), which, multiplied by 18 weeks, equates to $11,124. (ECF No. 30-2 at 1-2).
Time Period Overtime Rate Unpaid Overtime Hours Overtime Overtime Wages Wages Requested Awarded 12/15/2018 — $61.80 540 $11,124 $33,372.00 4/23/2019 Total $33,372.00
$41.20 * 1.5 = $61.80.
30 hours per week * 18 weeks.
$61.80 * 540 hours.
[Editor's Note: The preceding image contains the references for footnotes 5, 6, 7]
4. Liquidated damages
Under the FLSA, "a plaintiff who demonstrates that he was improperly denied either minimum or overtime wages may recover, in addition to reimbursement of these unpaid wages, an 'additional equal amount as liquidated damages.'" Xochimitl v. Pita Grill of Hell's Kitchen, Inc., No. 14 Civ. 10234 (JGK) (JLC), 2016 WL 4704917, at *15 (S.D.N.Y. Sept. 8, 2016) (quoting 29 U.S.C. § 216(b)), adopted by 2016 WL 6879258 (S.D.N.Y. Nov. 21, 2016). "[W]here the employer shows that, despite its failure to pay appropriate wages, it acted in subjective 'good faith' with objectively 'reasonable grounds' for believing that its acts or omissions did not violate the FLSA[,]" the Court has the discretion to deny liquidated damages. Barfield, 537 F.3d at 150 (quoting 29 U.S.C. § 260). This burden is "'a difficult one,'" id. (quoting Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132, 142 (2d Cir. 1999)), and where "defendants never made this showing in light of their default, they have not rebutted the presumption in favor of a liquidated damages award." Guaman v. J & C Top Fashion, Inc., No. 14 Civ. 8143 (GBD) (GWG), 2016 WL 791230, at *7 (S.D.N.Y. Feb. 22, 2016). A plaintiff who "is entitled to liquidated damages under the FLSA, but has been awarded wage and overtime damages
pursuant to the NYLL because state law provided the greater relief" is entitled to FLSA liquidated damages "based on 'the amount of actual damages that would have been awarded had the federal minimum wage rate applied.'" Kernes v. Glob. Structures, LLC, No. 15 Civ. 659 (CM) (DF), 2016 WL 880199, at *4 (S.D.N.Y. Mar. 1, 2016) (quoting Angamarca v. Pita Grill 7 Inc., No. 11 Civ. 7777 (JGK) (JLC), 2012 WL 3578781, at *7 (S.D.N.Y. Aug. 2, 2012)).
The NYLL also authorizes liquidated damages. See Xochimitl, 2016 WL 4704917, at *15. Effective November 24, 2009, "an employee was entitled to NYLL liquidated damages 'unless the employer proves a good faith basis for believing that its underpayment of wages was in compliance with the law.'" Id. (quoting NYLL § 198(1-a)). "Courts deem defendants' actions willful where they have defaulted, see e.g., Angamarca, 2012 WL 3578781, at *8, and, consequently, such defaulting defendants will have '[o]bviously ... made no showing of 'good faith.'" Xochimitl, 2016 WL 4704917, at *15 (quoting Guaman, 2016 WL 791230, at *7). Effective April 9, 2011, the liquidated damages award under the NYLL is 100% of the amount of unpaid wages. NYLL §§ 198(1-a), 663(1).
The Second Circuit precludes a plaintiff from recovering liquidated damages under both the FLSA and the NYLL. See Chowdhury v. Hamza Express Food Corp., 666 F. App'x 59, 60 (2d Cir. 2016); Mondragon, 2019 WL 2551536, at *11. A plaintiff should recover "under the statute that provides the greatest relief." Almanzar v. 1342 St. Nicholas Ave. Rest. Corp., No. 14 Civ. 7850 (VEC) (DF), 2016 WL 8650464, at *9 (S.D.N.Y. Nov. 7, 2016) (internal citation omitted). The NYLL allows for prejudgment interest in addition to liquidated damages, see NYLL § 198(1-a), but the FLSA does not. See Valdez v. H & S Rest. Operations, Inc., No. 14 Civ. 4701 (SLT) (MDG), 2016 WL 3079028, at *6 (E.D.N.Y. Mar. 29, 2016), adopted by 2016 WL 3087053 (E.D.N.Y. May 27, 2016). The NYLL therefore provides greater relief. See Mondragon, 2019 WL 2551536, at *11.
Having defaulted, Shift has not carried its burden of demonstrating good faith under the NYLL, see Mondragon, 2019 WL 2551536, at *11, and therefore, Burns is entitled to liquidated damages equivalent to 100% of his unpaid overtime wages set forth above. See Schalaudek, 2017 WL 729544, at *10 (awarding liquidated damages of 100% of unpaid wages where defendants had defaulted).
5. Statutory damages
Burns alleges that Shift failed to provide him with a wage notice at the time of his hiring, and failed to furnish 18 weekly wage statements, such that he is entitled to statutory penalties. (ECF Nos. 6 ¶¶ 7, 31, 63-65; 30-2 at 3). Violations of Section 195(1) result in damages of $50 per workday, for a maximum of $5,000, which is reached after 100 days. NYLL § 198(1-b). Violations of Section 195(3) result in damages of $250 per workday, which is reached after 20 days. NYLL § 198(1-d). See Suriel, 2022 WL 1750232, at *16. Burns worked 127 days, for which he is entitled to the maximum of $5,000 under NYLL § 198(1-b), and did not receive wage statements for 18 days, for which he is entitled to $4,500.00 (18*$250.00). Accordingly, the Court respectfully recommends that Burns be awarded $9,500.00 in statutory damages.
6. Pre-judgment interest
Burns seeks pre-judgment interest in the amount of $11,647.14 with respect to his compensatory damages under the NYLL. (ECF Nos. 6 ¶¶ 58, 74; 30-2
at 3). As this Court has held, "'prejudgment interest is still appropriate where a plaintiff is awarded liquidated damages under the NYLL.'" Suriel, 2022 WL 1750232, at *16 (quoting Morales v. MwBronx, Inc., No. 15 Civ. 6296 (TPG), 2016 WL 4084159, at *10 (S.D.N.Y. Aug. 1, 2016)). "Prejudgment interest applies only to the amount of compensatory damages, and excludes the amount of liquidated damages." Maldonado v. La Nueva Rampa, Inc., No. 10 Civ. 8195 (LLS)(JLC), 2012 WL 1669341, at *11 (S.D.N.Y. May 14, 2012), adopted by, Order dated Aug. 9, 2012 (ECF No. 20). "Under New York law, 'a plaintiff who prevails on a claim for breach of contract is entitled to prejudgment interest as a matter of right.'" Midwood Junction v. Puerto del Sol Int'l Inv., S.A., No. 15 Civ. 5181 (RA) (SN), 2016 WL 8905357, at *4 (S.D.N.Y. Dec. 5, 2016) (quoting U.S. Naval Inst. v. Charter Commc'ns, Inc., 936 F.2d 692, 698 (2d Cir. 1991)); see N.Y. C.P.L.R. § 5001(a) (providing that "[i]nterest shall be recovered upon a sum awarded because of a breach of performance of a contract, or because of an act or omission depriving or otherwise interfering with title to, or possession or enjoyment of, property").
Under New York law, interest is awarded at the rate of nine percent per year. N.Y. C.P.L.R. § 5004. For damages occurring "at various times, interest shall be computed upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date." N.Y. C.P.L.R. § 5001. "Simple prejudgment interest is calculated from a singular, midpoint date ... [and] by multiplying the principal by the interest rate by the time period—from a singular, midpoint date—up until and including the date judgment is entered." Maldonado, 2012 WL 1669341, at *11. The midpoint of a plaintiff's employment is often used as the date from which to calculate prejudgment interest in wage-and-hour cases. See Suriel, 2022 WL 1750232, at *17; Mondragon, 2019 WL 2551536, at *11.
Burns does not specify how he computed prejudgment interest. The Court will employ the methodology set forth in the cases cited above. Burns' employment lasted from December 15, 2018 to April 23, 2019—a total of 129 days—and the midpoint of his employment was February 17, 2019 (64 days after December 15, 2018). (ECF No. 30.1 ¶ 2). Accordingly, the Court respectfully recommends an award of prejudgment interest calculated from February 17, 2019 through November 24, 2021, the date Burns filed the Damages Submission. See Suriel, 2022 WL 1750232, at *17 (using date of plaintiff's damages submission as the end point for calculating prejudgment interest); Reyes v. Café Cousina, 2019 WL 5722475, at *13 (same). This amount is calculated as follows:
Principal Interest Calculation Interest Amount $35,695.35 + $33,372.00 = 2.77 years * $69,067.35 * 0.09 $17,218.49 $69,067.35
The period from February 17, 2019 through November 24, 2021 is 1011 days, or 2.77 years (1011/365).
[Editor's Note: The preceding image contains the reference for footnote8]
7. Post-judgment interest
Burns also seeks post-judgment interest. (ECF No. 6 ¶¶ 6-7). The applicable
federal statute provides that "[i]nterest shall be allowed on any money judgment in a civil case recovered in a district court... calculated from the date of entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding ... the date of the judgment." 28 U.S.C. § 1961. The Second Circuit has explained that an award of post-judgment interest is mandatory. See Schipani v. McLeod, 541 F.3d 158, 165 (2d Cir. 2008); see also Suriel, 2022 WL 1750232, at *17 (awarding post-judgment interest). Given the mandatory nature of post-judgment interest, the Court respectfully recommends that Burns be awarded post-judgment interest in an amount consistent with 28 U.S.C. § 1961.
8. Attorneys' fees
Burns seeks an award of attorneys' fees in the amount of $10,256.25. (ECF No. 30-3). The NYLL permits a successful plaintiff to recover reasonable attorneys' fees. NYLL §§ 198, 663. "Whether an attorneys' fee award is reasonable is within the discretion of the court." De Jesus v. Sea Crest Diner-Rest., No. 17 Civ. 275 (ADS) (SIL), 2018 WL 3742778, at *11 (E.D.N.Y. May 7, 2018) (citing De Jesus Galindo v. BLL Rest. Corp., No. 15 Civ. 5885 (HBP), 2018 WL 1684412, at *3 (S.D.N.Y. Apr. 6, 2018)). To determine a "presumptively reasonable fee," the Court multiples the hours counsel reasonably spent on the litigation by a reasonable hourly rate. Millea v. Metro-North R.R. Co., 658 F.3d 154, 166 (2d Cir. 2011). "The presumptively reasonable fee boils down to what a reasonable paying client would be willing to pay, given that such a party wishes to spend the minimum necessary to litigate the case effectively." Simmons v. N.Y.C. Transit Auth. 575 F.3d 170, 174 (2d Cir. 2009) (internal citations omitted).
Burns does not actually state this number in the Damages Submission; rather, the Court has calculated it by deducting the requested costs of $658.38 from the total of $10,914.63 that appears in ECF No. 30-3.
a. Reasonable Hourly Rate
Burns was represented by Hui Chen, Esq. and an attorney with the initials "EG" at the Law Offices of Hui Chen and Associates, P.C. (the "Firm"). (ECF No. 30-3). Chen and "EG" each recorded their time at a rate of $375.00 per hour. (Id.).
To determine whether an hourly rate is reasonable, the Second Circuit has instructed district courts to "apply the prevailing rate within the district for similar services by lawyers of comparable experience and skill." Galeana v. Lemongrass on Broadway, Corp., 120 F. Supp. 3d 306, 323 (S.D.N.Y. 2014) (citing Gierlinger v. Gleason, 160 F.3d 858, 882 (2d Cir. 1998)). A court may also adjust the hourly rate to account for case-specific variables such as:
[i] the time and labor required; [ii] the novelty and difficulty of the questions; [iii] the skill requisite to perform the legal service properly; [iv] the preclusion of employment by the attorney due to acceptance of the case; [v] the customary fee; [vi] whether the fee is fixed or contingent; [vii] time limitations imposed by the client or the circumstances; [viii] the amount involved and the results obtained; [ix] the experience, reputation, and ability of the attorneys; [x] the "undesirability' of the case; [xi] the nature and length of the professional relationship with the client; and [xii] awards in similar cases.
Gamero v. Koodo Sushi Corp., 328 F. Supp. 3d 165, 173 (S.D.N.Y. 2018) (quoting Hensley v. Eckerhart, 461 U.S. 424, 430 n.3, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983)).
In this district, courts generally award experienced wage-and-hour attorneys between $300 to $400 per hour. See Surdu v. Madison Global, LLC, No. 15 Civ. 6567 (HBP), 2018 WL 1474379, at *10 (S.D.N.Y. Mar. 23, 2018) (collecting cases regarding litigators with one or more decades of experience); see also Pastor v. Alice Cleaners, Inc., No. 16 Civ. 7264 (JLC), 2017 WL 5625556, at *7 (S.D.N.Y. Nov. 21, 2017) (noting fees between $250 and $450 for experienced litigators in wage-and-hour cases in this district); but see Williams v. Epic Sec. Corp., 368 F.Supp.3d 651, 657-58 (S.D.N.Y. 2019) (awarding $600 per hour to lead attorney with 32 years of experience and $350 per hour to junior partner with 11 years of non-wage-and-hour experience).
Unfortunately, Burns has not submitted any evidence of his attorneys' experience and skills or any other relevant factors that would assist the Court in assessing the reasonableness of the hourly rates he requests. According to the Firm's website, however, Chen is a graduate of Cardozo Law School, following which he clerked for the Honorable William D. Wall (E.D.N.Y.), and has taught at Pace University, John Jay College of Criminal Justice, and Touro College. See Professionals, HUI CHEN AND ASSOCIATES, PLLC, http://chencounsel.com/a-homepage-section/ (last visited July 26, 2022). According to the Court's own research, at least one other court in this District has declined to award Chen the requested rate of $375. See Li v. SMJ Constr. Inc., No. 19 Civ. 5309 (PGG) (KNF), 2021 WL 9036272, at *5 (S.D.N.Y. Aug. 25, 2021) (recommending that a 20% discount be applied to Chen's requested rate and hours). The Court applies a similar discount to Chen's requested rate here to arrive at an hourly rate of $300. The Court finds that this reduction is particularly appropriate in this case, in which there were no novel or complex legal or factual questions and in which Defendants have defaulted. See Xochimitl, 2016 WL 4704917, at *20 (reducing attorneys' hourly rates where defendants had defaulted); see also Smith v. Digital Soc. Retail, Inc., No. 18 Civ. 6602 (RA), 2019 WL 5450397, at *3 (S.D.N.Y. Oct. 24, 2019) (declining to award $400 hourly rate where attorney "has not shown there is a meaningful distinction between his prior cases and the instant one so as to warrant" higher rate).
The Firm's website contains no mention of an attorney with the initials "EG," and, accordingly, the Court has no basis on which to assess a reasonable hourly rate for this attorney. The Court therefore recommends that no fees be awarded for "EG." See Lopez v. Emerald Staffing, Inc., No. 18 Civ. 2788 (SLC), 2020 WL 915821, at *14 (S.D.N.Y. Feb. 26, 2020) (declining to award any fees as to individual whose name, title, experience, and role in the case were unexplained).
b. Reasonable Hours Expended
Chen expended a total of 13 hours on Burns' case. (ECF No. 30-3). To determine the reasonable number of hours required by a case, the critical inquiry is "whether at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures." Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992). Courts must perform "a conscientious and detailed inquiry into the validity of the representations that a certain number of hours were usefully and reasonably expended." Lunday v. City of Albany, 42 F.3d 131, 134 (2d Cir. 1994). "If the Court finds that some of the claimed hours are 'excessive, redundant or otherwise unnecessary,'
it may reduce the number of reasonable hours accordingly." Bumble & Bumble, LLC v. Pro's Choice Beauty Care, Inc., No. 14 Civ. 6911 (VEC) (JLC), 2016 WL 658310, at *9 (S.D.N.Y. Feb. 17, 2016), adopted by 2016 WL 1717215 (S.D.N.Y. Apr. 27, 2016) (quoting Hensley, 461 U.S. at 434, 103 S.Ct. 1933 (1983)).
The Court has examined the contemporaneous billing records for Burns' case, including the hours expended, dates of work, and brief descriptions of the work Chen performed. (ECF No. 30-3). The Court finds that the hours Chen expended were reasonable and not "excessive, redundant, or otherwise unnecessary." Hensley, 461 U.S. at 434, 103 S.Ct. 1933.
Accordingly, the Court respectfully recommends that Burns be awarded attorneys' fees in the amount of $3,900.00 ($300*13 hours).
9. Costs
Burns requests $658.38 in costs for service and mailing. (ECF No. 30-3). An employee who prevails in a wage-and-hour action is entitled to recover costs. 29 U.S.C. § 216(b); NYLL § 663(1). Recoverable costs are "those reasonable out-of-pocket expenses incurred by attorneys and ordinarily charged to their clients." Leblanc-Sternberg v. Fletcher, 143 F.3d 748, 763 (2d Cir. 1998) (internal citation omitted). In support of his requests for costs, however, Burns has only submitted the Firm's billing record, which contains a line item in the amount of $658.38 for "USPS certified mail; Alexander Pool & Co., Inc. Corp. service in Albany and Personal service attempts in NJ; DLS, Inc. personal service attempts in NYC." (ECF No. 30-3). Burns did not, however, "submit invoices or receipts to substantiate the claimed amount[s]." Khotovitskaya v. Shimunov, No. 18 Civ. 7303 (NGG)(CLP), 2021 WL 868781, at *2 (E.D.N.Y. Mar. 9, 2021) (denying costs where party failed to submit documentation substantiating the amounts reflected in attorney billing records); see Suriel, 2022 WL 1750232, at *18 (declining to award costs for unsubstantiated amounts listed only in attorney billing record); Sanchez v. Jyp Foods Inc., 2018 WL 4502008, at *17 (S.D.N.Y. Sept. 20, 2018) (noting that adequate substantiation is required for award of costs). Accordingly, the Court respectfully recommends that costs not be awarded.
V. CONCLUSION
For the reasons set forth above, the Court respectfully recommends that:
(1) Burns be awarded $148,608.10 in damages against Shift, comprised of: (a) $55,145.61 in breach of contract damages; (b) $33,372.00 in unpaid overtime wages; (c) $33,372.00 in liquidated damages; (d) $ 9,500.00 in WTPA damages; and (e) $17,218.49 in pre-judgment interest;
(2) Burns be awarded post-judgment interest pursuant to 28 U.S.C. § 1961;
(3) Burns be awarded attorneys' fees in the amount of $3,900.00; and
(4) Burns' claims against Scott be DISMISSED without prejudice pursuant to Federal Rules of Civil Procedure 4(m) and 41(b).
Burns shall promptly serve a copy of this Report and Recommendation on Defendants and, by July 29, 2022, file proof of service on the docket.
* * *
NOTICE OF PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file written objections pursuant to
28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. See also Fed. R. Civ. P. 6(a), (d) (adding three additional days when service is made under Fed. R. Civ. P. 5(b)(2)(C), (D) or (F)). A party may respond to another party's objections within fourteen (14) days after being served with a copy. Fed. R. Civ. P. 72(b)(2). Such objections, and any response to objections, shall be filed with the Clerk of the Court. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 6(a), (d), 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Koeltl.
FAILURE TO OBJECT WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 6(a), (d), 72(b); Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985).