Opinion
99 Civ. 9033 (RCC)
March 12, 2002
Opinion and Order
Plaintiffs are all adult garment workers who worked in a garment factory at 103 East Broadway in New York's Chinatown. They bring this action against: Liberty Apparel Company, Inc. ("Liberty"), a garment manufacturing company; Albert Nigri ("Nigri") and Hagai Laniado ("Laniado"), who are co-owners and officers of Liberty; six corporations doing business as contractors in the garment industry ("Contractor Corporations") as well as Ngon Fong Yuen ("Yuen") and Lai Huen Yam (also known as Steven Yam)("Yam"), who are co-owners, directors and officers of the Contractor Corporations (all referred to jointly as "Defendants"). Plaintiffs are seeking monetary and declaratory relief to redress alleged violations of the Fair Labor Standards Act of 1938, as amended ("FLSA"), the New York Compilation of Codes, Rules and Regulations ("NYCRR"), and New York Labor Law. Defendants Liberty, Nigri and Laniado ("Moving Defendants") initially moved this Court for summary judgment and then Plaintiffs cross-moved for summary judgment, seeking a determination that Plaintiffs were Moving Defendants' employees under the FLSA and New York Labor Law. For the reasons stated herein, Moving Defendants' motion for summary judgment is granted in part and denied in part, and Plaintiffs' motion for summary judgment is denied.
The twenty-six plaintiffs named in the Complaint are Ling Nan Zheng, Ren Zhu Yang, Yun Zhen Huang, Wen Qin Lin, Sai Bing Wang, Ye Biao Yang, Cui Zhen Lin, Rong Yun Zhen, Hui Fang Lin, Xiu Ying Zheng, Jin Ping Lin, Hui Ming Dong, Yu Bing Lou, Sao Chi Kwok, Sai Xian Tang, Yi Zhen Lin, Rui Fang Zhang, Mei Juan Yu, Mei Ying Li, Qin Fang Qui, Yi Mei Lin, Mei Zhu Dong, Fung Lam, Xiu Zhu Ye, Sing Kei Lam and Zue Jin Lin.
The six Contractor Corporations named as Defendants in the Complaint are: 88 Fashion Inc.; 998 Fashions, Inc.; Top Five Sportswear, Inc.; 103 Fashion Inc.; S.P.R. Sportswear, Inc.; and 9l Fashion Inc.
I. JURISDICTION
The Court has subject matter jurisdiction over this matter pursuant to 29 U.S.C. § 216(b) and 28 U.S.C. § 1331, 1337 1367.
II. BACKGROUND
A. Facts
Liberty is a garment manufacturing company that designs, produces, markets and sells clothing for resale to the public. Compl. ¶ 17. Liberty contracts out certain phases of the assembly process, such as cutting and sewing, to other entities that, in turn, hire workers to perform such tasks. Id. It appears that Moving Defendants entered into such a contract with the Contractor Corporations, and that Yuen and Yam then hired Plaintiffs as production workers who were compensated at piece rates. Id. ¶ 18.
Typically, the manufacturing process begins with the creation of a pattern by Liberty employees. Nigri Aff. ¶ 7. Based on the pattern, Liberty sends a sample to the customer for approval and then to the warehouse maintained by Liberty, where Liberty employees use the pattern and sample to cut the garments out of fabric provided by Liberty. Id. ¶¶ 7-8. Next, the cut fabric is sent to a middleman assembler company, here, Defendant Yam and three of the Contractor Corporations, 998 Fashions, Inc. ("998"), 103 Fashion Inc. ("103"), and S.P.R. Sportswear, Inc. ("SPR"), to stitch and finish the pieces. The process of stitching and finishing the pieces includes the sewing of fabrics, buttons, and labels, as well as cuffing, hemming, cutting threads and hanging garments. Id. ¶ 9. The assembler companies employ workers to perform these tasks and pay them at a piece rate. Compl. ¶ 18. During the relevant time period, Liberty utilized the services of approximately thirty to forty assemblers. Affidavit of Albert Nigri, dated October 31, 2000 [Nigri Aff.], ¶ 15 n. 9.
The parties do not dispute the fact that Liberty employed persons to monitor quality control. Id. ¶ 20; Affidavit of Albert Nigri, dated January 16, 2001 [Nigri Reply Aff.], ¶¶ 10-13. The quality control person made visits to the assemblers' factories "to inspect the appearance and quality of the finished garments and to make certain that Liberty's garments were being worked upon." Nigri Aff. ¶ 13.
Plaintiffs, who all worked in a factory at 103 East Broadway, allege that a representative from Liberty visited the factory approximately two to four times a week on average and that the representative monitored Plaintiffs' work for up to three hours a day. Compl. ¶ 8; Declaration of Ling Nan Zheng [Zheng Decl.], Exhibit C of Reif Declaration [Reif Decl.], ¶ 6; Declaration of Mei Zhu Dong [Dong Decl.], Exh. E of Reif Decl., ¶¶ 5. In their affidavits, Plaintiffs swear that as they finished working on garments, the Liberty representative would inspect their work and give instructions if corrections or changes needed to be made. Declaration of Ren Zhu Yang [Yang Decl.], Exh. E of Reif Decl., ¶ 9; Declaration of Fung Lam [Lam Decl.], Exh. D of Reif Decl., ¶ 8. One of the Plaintiffs also swears that she informed the Liberty representatives on many occasions of the fact that the workers were not being paid. Zheng Decl. ¶ 8. The affidavits state further that the representatives exhorted Plaintiffs to work harder and faster and that on occasion a representative had gotten angry at the workers. Dong Decl. ¶¶ 6-7.
In response, Moving Defendants contend that Liberty's quality control person was specifically instructed: to speak only to Yam or Yam's wife; not to communicate with any employees; and, not to instruct the employees on their work. Nigri Aff. ¶ 20. The Moving Defendants do not, however, provide any affidavits from the persons employed for quality control stating either that they did not in fact communicate with the workers or that they were not told that Plaintiffs were not being paid. Moving Defendants further contend that the quality control persons were expected to spend only thirty minutes at each of the assemblers' shops or factories. Nigh Reply Aff. ¶ 14. Again, there are no affidavits from the quality control persons stating that they in fact spent no more than thirty minutes per visit.
In his affidavit, Nigri swears that Moving Defendants: did not employ two quality control persons simultaneously; did not employ a quality control person during some of the relevant time period; and did not employ a man as a quality control person. Id. ¶ 10-13. However, Plaintiffs' affidavits only make the general claim that two different Liberty representatives would visit the factories to monitor their work; they do not call them quality control persons, nor do they state that the representatives were employed by Liberty during specific time periods or even the same time period.
Lastly, the parties dispute the percentage of Plaintiffs' work that consisted of Liberty garments. In their affidavits, Plaintiffs state that approximately 70-75% of their work was for Liberty during the relevant time period. They explain that they knew when they were working on Liberty garments because of the distinctive labels that needed to be sewn in the garments as well as the specific lot numbers that came with the garments. Zheng Decl. ¶ 4; Lam Decl. ¶ 5. In his affidavit however, Nigri argues, based on Plaintiffs' hand-written notes and records, that the percentage was closer to 10-15%.
B. Claims
Moving Defendants claim that all of Liberty's dealings with SPR, 103 and 998 were at arms length and not as a joint employer of Plaintiffs. Accordingly, the Moving Defendants argue that, to the extent Plaintiffs have a claim for unpaid wages against the Contractor Corporations, such claim cannot implicate Moving Defendants.
However, Plaintiffs allege that Moving Defendants and Contractor Corporations functioned as an integrated economic unit and that Moving Defendants exercised significant control over Plaintiffs by supervising and controlling the substance of Plaintiffs' daily work, as well as directly monitoring the quality of the garments. Compl. ¶ 19. Plaintiffs allege that Defendants employed Plaintiffs during various time periods ranging from November 1998 through April 1999. and that Defendants, in each case, failed to pay Plaintiffs: for certain periods of their employment; at the minimum rates required by the FLSA and New York Labor Law; and for overtime compensation above the rate of regular pay. See id. ¶¶ 23-45 (setting forth the individual allegations with respect to each Plaintiff).
More specifically, Plaintiffs allege that Defendants violated 29 U.S.C. § 207 and Title 12 of the NYCRR Section 142-2.2, which require employers to compensate employees at one and one-half times the regular rate when an employee works in excess of 40 hours per week. Plaintiffs also allege that Defendants violated 29 U.S.C. § 206, which requires an employer to pay employees a legally-mandated minimum wage, and that Defendants violated a similar provision of New York Labor Law, Section 652(1). Plaintiffs further allege that Defendants violated New York Labor Law Section 191, which requires an employer to pay an employee who is a manual worker on a weekly basis, no later than seven calendar days after the end of the week in which the wages are earned. In addition, Plaintiffs allege that Defendants violated Section 193 of New York Labor Law in that Defendants allegedly deducted and retained for themselves 5% of the monies to be paid to Plaintiffs as wages. Lastly, Plaintiffs allege that Moving Defendants contracted with the Contractor Corporations, within the meaning of New York Labor Law Section 345-a, and that Moving Defendants knew, or should have known with the exercise of reasonable care or diligence, of the Contractor Corporations' failure to comply with the provisions of New York Labor Law that govern the payment of wages and minimum wages.
Based on these allegations, Plaintiffs seek: a judgment declaring that Defendants violated Plaintiffs' rights under 29 U.S.C. § 206 207, Title 12 of the NYCRR Section 142-2.2, and New York Labor Law Sections 191, 193 and 652; a judgment declaring that Liberty, Nigri and/or Laniado are liable for the Contractor Corporations' alleged violations of New York Labor Law; a judgment against Defendants jointly and severally for damages in the amount of the unpaid minimum wages and overtime compensation under New York Labor Law and the FLSA as liquidated damages; an additional amount as liquidated damages equal to 25% of the total amount of the wages due each plaintiff under New York Labor Law; prejudgment interest; costs, disbursements and reasonable attorney's fees; and such other relief as may be just and proper.
Moving Defendants neither dispute nor concede that Plaintiffs were not paid in accordance with the relevant state and federal statutes. Instead, Moving Defendants argue that Plaintiffs were not employed by Moving Defendants and that Moving Defendants did not exert any control over Plaintiffs. Moving Defendants argue that such facts remove them from coverage of the ELSA, NYCRR and New York Labor Law, thereby leaving no genuine issue of material fact for trial. Accordingly, the Court must determine whether Moving Defendants fall within the definition of "employer" under the ELSA, NYCRR and New York Labor Law, and if not, whether there are any remaining claims.
C. Statutory Framework
Section 216(b) of the ELSA provides that:
Any employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages.
29 U.S.C. ¶ 216(b). An "employer" is defined as "any person acting directly or indirectly in the interest of an employer in relations to an employee . . . ." 29 U.S.C. ¶ 203(d). The statute further provides that where an individual may stand in the relation of an employee to two or more employers at the same time, whether the situation is one of "joint employment" is to be determined by the facts of the particular case. Specifically,
[i]f all the relevant facts establish that two or more employers are acting entirely independently of each other and are completely disassociated with respect to the employment of a particular employee, who during the same workweek performs work for more than one employer, each employer may disregard all work performed by the employee for the other employer (or employers) in determining his own responsibilities under the Act. On the other hand, if the facts establish that the employee is employed jointly by two or more employers, i.e., that employment by one employer is not completely disassociated from employment by the other employer(s), all of the employee's work for all of the joint employers during the work week is considered as one employment for purposes of the act.29 C.F.R. § 791.2(a). In order to determine whether a joint employment situation exists, a court should consider whether there is an arrangement between the employers to share the employees, services, such as interchanging employees, whether one employer is acting directly or indirectly in the interest of the other employer in relation to the employees, and whether the employers are not completely disassociated with respect to the employment and may be deemed to share control of the employee, either directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under the control of the other employer. 29 C.F.R. § 791.2.
New York Labor Law Section 345-a provides that:
a manufacturer or contractor who contracts or subcontracts with another manufacturer or contractor for the performance of any apparel industry service . . . and so knew or should have known with the exercise of reasonable care or diligence of such other manufacturer's or contractor's failure to comply . . . shall be liable for such failure. . . . [T]he exercise of reasonable care or diligence by a manufacturer or contractor shall be presumed if, prior to the execution of such contract or subcontract, and annually thereafter, such manufacturer or contractor receives from the department written assurance of compliance with section three hundred forty-one of this article.
N.Y. Labor Law § 345-a-1, 2. The apparel industry is defined as the "making, cutting, sewing, finishing, assembling, pressing or otherwise producing, by any of the foregoing apparel industry services, any men's, women's, children's or infants' apparel . . . ." N.Y. Labor Law § 340(c). A manufacturer is defined as any person who ". . . contracts with a contractor to perform in New York state the cutting, sewing, finishing, assembling, pressing or otherwise producing any . . . apparel . . . ." N.Y. Labor Law § 340(d). The questions before the Court, therefore, are whether Moving Defendants are employers withing the meaning of the FLSA, NYCRR and New York Labor Law and whether they are therefore liable under either federal or state law.
III. STANDARD
The Court's role in a motion for summary judgment is not to resolve disputed issues of fact but to determine whether there are any genuine issues of material fact for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, (1986). Federal Rule of Civil Procedure 56(c) provides that summary judgment is appropriate:
if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
Fed.R.Civ.P. 56(c). When viewing the evidence, the Court must "assess the record in the light most favorable to the non-movant" and resolve all ambiguities and "draw all reasonable inferences in its favor." Anderson, 477 U.S. at 255; American Casualty Co. v. Nordic Leasing, Inc., 42 F.3d 725, 728 (2d Cir. 1994); Delaware Hudson Ry. Co. v. Consolidated Rail Corp., 902 F.2d 174, 177 (2d Cir. 1990).
The movant bears the initial burden of informing the court of the basis for its motion and demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 13.5. 317, 323 (1986). If the movant meets this burden, the party opposing the motion must come forward with specific evidence demonstrating the existence of a genuine dispute of material fact. Fed.R.Civ.P. 56(e); Anderson, 477 U.S. at 249; Celotex, 477 U.S. at 323-24. Where the nonmovant "propounds a reasonable conflicting interpretation of a material disputed fact," summary judgment is inappropriate. Schering Corp. v. Home Ins. Co., 712 F.2d 4, 9-10 (2d Cir. 1983).
Conversely, the non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Bald assertions or conjecture unsupported by evidence are insufficient to overcome a motion for summary judgment. Casey v. Crescenzi, 923 F.2d 18, 21 (2d Cir. 1991); Western World Ins. Co. v. Stack Oil, Inc., 922 F.2d 118, 121 (2d Cir. 1990).
An issue of fact is genuine when "a reasonable jury could return a verdict for the nonmoving party," and such contested facts are material to the outcome of the particular litigation if the substantive law at issue so renders them. Anderson, 477 U.S. at 248. "If, as to the issue on which summary judgment is sought, there is any evidence in the record from any source from which a reasonable inference could be drawn in favor of the non-moving party, summary judgment is improper." Chambers v. TRM Copy Centers Corp., 43 F.3d 29, 37 (2d Cir. 1994). Only when it is apparent that no rational trier of fact "could find in favor of the nonmoving party because the evidence to support its case is so slight" should a court grant summary judgment. Gallo v. Prudential Residential Services, Ltd. Partnership, 22 F.3d 1219, 1223-24 (2d Cir. 1994).
IV. DISCUSSION
NYCRR Section 142-2.2 requires an employer to pay an employee overtime at a wage rate of 1.5 times the employee's regular rate pursuant to the FLSA. For the purposes of this opinion therefore, the same analysis applies for both the FLSA and NYCRR.
As a preliminary matter, the Court finds that Nigri and Laniado's alleged lack of operational control over the non-moving Defendants is not dispositive on the issue of whether they may be individually liable under the FLSA. The fact that Nigri and Laniado may not have had "direct control over the [employees] . . . ignores the relevance of the totality of the circumstances in determining . . . operational control . . ."Herman v. RSR Security Services Ltd., 172 F.3d 132, 140 (2d Cir. 1999). Accordingly, the Court will examine Nigri, Laniado and Liberty's alleged liability under the FLSA jointly.
In order for a party to be held liable under the FLSA, a person must be an employer within the meaning of the statute. Although the Supreme Court has emphasized that courts should interpret the provisions of the FLSA expansively, an alleged employer must, at a minimum, possess the power to control the workers in question. Id. at 139 (citing Carter v. Dutchess Community Collete, 735 F.2d 8, 12 (2d Cir. 1984)); see also 29 C.F.R. § 791.2. When determining whether a party possesses such control, a court should examine the "economic reality" presented by the facts of each case. Goldberg v. Whitaker House Coop., 366 U.S. 28, 33 (1961).
The parties suggest differing tests to determine the economic reality of the instant case. Plaintiffs argue that the interpretation set forth in Lopez v. Silverman, 14 F. Supp.2d 405, 413-418 (S.D.N.Y. 1998), should apply, while Moving Defendants argue that the Carter interpretation of the economic reality test is controlling. In its 1984 opinion in Carter, the Second Circuit weighed four factors, stating that a court should consider "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, 735 F.2d at 12 (citation omitted). A far more expansive test was later applied in Lopez. However, this Court declines to follow Lopez because the interpretation of the economic reality test, originally set forth in Carter, was reaffirmed by the Second Circuit in a 1999 case, Herman v. RSR Security Services Ltd., 172 F.3d 132, 140 (2d Cir. 1999).
The factors applied in Lopez are: (1) the extent to which the work is a discrete line-job forming an integral part of the joint employer's integrated process of production; (2) whether the joint employer's premises and equipment were used for the work; (3) the extent to which the employees' work is performed for the putative employer; (4) permanence or duration of the working relationship with the putative joint employer; (5) the joint employer's degree of control over workers; (6) whether responsibility under the contract with the putative joint employer passes without material changes between potential joint employees; (7) whether workers had a business organization capable of shifting as a unit between employers; and (8) additional factors. Lopez, 14 F. Supp.2d at 420-22.
Turning to the first prong of the economic reality test, the Court finds that there is no genuine issue of material fact regarding whether Moving Defendants had the power to hire or fire Plaintiffs. Indeed, in Plaintiffs opposition to Moving Defendants' motion for summary judgment, Plaintiffs never dispute this fact, and merely claim that the assertions by the Moving Defendants that they did not hire, fire, pay or give assignments to Plaintiffs do not refute Plaintiffs' economic dependance upon the Moving Defendants. Pl.'s Mem. in Opp., at 13.
With respect to the second prong, whether Moving Defendants supervised and controlled employee work schedules or conditions of employment, the Court finds that Moving Defendants did not exercise such control to an extent that is relevant to this analysis. First, there is no suggestion in the record that Moving Defendants controlled employee work schedules by setting their hours or by deciding which days of the week the Plaintiffs were to work. Second, although the parties agree that Liberty's quality control person actually visited the factories to inspect the appearance and quality of the garments, there is no evidence of the fact that the quality control person influenced the Plaintiffs' work environment or conditions by requiring or prohibiting that certain amenities or fixtures be available.
Similarly, the fact that Liberty paid Yam at piece rates, and that Yam, in turn, paid Plaintiffs at piece rates, does not support the conclusion that Liberty or Moving Defendants exercised control over the rate and method of payment. Moving Defendants neither directly paid Plaintiffs nor signed Plaintiffs' checks, which is a key question when making such determination. See Herman, 172 F.3d at 140. Further, there is no suggestion in the record that Moving Defendants directly maintained or were in any way involved in the maintenance of Plaintiffs' employment records.
Plaintiffs' suggestion that the contractual relationship between Liberty and Yam amounted to "indirect influence" over such employment decisions and conditions is unpersuasive. Further, even assuming that some "indirect influence" existed, for the Court to hold that any such influence, under the specific facts of this case, is tantamount to the type of power enjoyed by an employer, would permit an extraordinarily broad definition of employer, even considering the expansive view taken with respect to the FLSA.
The Supreme Court has held that, "[t]here may be independent contractors who take part in production or distribution who would alone be responsible for the wages and hours of their own employees."Rutherford Food Corp. v. McComb, 331 U.S. 722, 729 (1947). Considering the totality of the circumstances presented by the particular facts of this case, it is clear to the Court that Moving Defendants were not employers within the meaning of the FLSA or NYCRR. Id. at 730. Accordingly, Moving Defendants' motion for summary judgment on this issue is GRANTED and Plaintiffs' motion is DENIED.
B. New York Labor Law Claims
Moving Defendants also move to dismiss all of Plaintiffs' claims under New York Labor Law, arguing only in a footnote to Nigri's affidavit, that the basis for dismissal of those claims is identical to the basis for dismissal of the federal claims. Nigh Aff. ¶ 3 n. 1. Unlike the FLSA however, New York Labor Law has provided for the liability of manufacturers or contractors if they knew, or should have known with the exercise of reasonable care or diligence, of such other manufacturer or contractor's failure to comply with Articles 6 or 19, which govern the payment of wages and minimum wages. N.Y. Labor Law § 345-a.
Plaintiffs argue that Moving Defendants must have been fully aware of the limited range within which Plaintiffs' wages fell, because the price that the Moving Defendants paid to the Contracting Corporations would have acted as an absolute ceiling or cap to Plaintiffs' wages. They point out that Moving Defendants admitted that the Contracting Corporations were paid by the garment or piece and never disputed that Plaintiffs were paid by the piece. Deposition of Albert Nigri [Nigri Depo.], Exh. A of Reif Decl., at 67-68 (discussing the prices paid per garment and using $1.80, $2.00 and $3.50 as examples); Zheng Decl. ¶ 3; Yang Decl. ¶¶ 2-3. Moreover, they draw this Court's attention to the following facts: (1) Moving Defendants admitted that they placed time constraints on the Contracting Corporations by requiring work to be completed by certain deadlines; and (2) Liberty representatives visited the factory premises to inspect the quality of the garments and also to "make certain that Liberty's garments were being processed in a timely fashion." Nigri Depo. at 62-63; Nigri Aff. ¶ 13. Plaintiffs argue, that as a result, Moving Defendants must have known how many workers were employed by the Contracting Corporations as well as the number of hours they were working to complete the work. Based on the foregoing, Plaintiffs suggest that Moving Defendants could have easily figured out how much Plaintiffs were being paid by a simple mathematical calculation. They therefore ask the Court to draw the conclusion that Moving Defendant knew or should have know with reasonable care and diligence that Plaintiffs were not making minimum wage or being paid overtime.
These arguments however do not amount to the necessary showing of evidence for purposes of prevailing on Plaintiffs' summary judgment motion. The movant bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Instead however, Plaintiffs have offered sufficient evidence to create a reasonable conflicting interpretation of a material disputed fact.
As stated earlier, Moving Defendants have never disputed that Plaintiffs were not paid in accordance with the relevant state statutes. Moreover, Plaintiffs have submitted affidavits to substantiate their claims that they were not in fact paid wages that they were due. Zheng Decl. ¶ 3; Yang Decl. ¶¶ 2-3. In addition, one Plaintiff swears that she complained many times to Liberty representatives that the workers were not being paid. Zheng Decl. ¶ 8. The only evidence that Moving Defendants offer to refute that sworn affidavit is Nigri's affidavit stating that the quality control person was instructed not to speak to the workers. Moving Defendants do not submit a single affidavit by the representatives in charge of quality control stating that they did not actually speak with the workers or hear Plaintiffs complaints that the workers were not being paid.
If, as to the issue on which summary judgment is sought, there is any evidence in the record from any source from which a reasonable inference could be drawn in favor of the nonmoving party, summary judgment is inappropriate. Chambers v. TRM Copy Centers Corp., 43 F.3d 29, 37 (2d Cir. 1994). Here, Moving Defendants devoted very little space or effort in arguing the New York Labor Law claims, perhaps based on the erroneous assumption that these claims were the same as the FLSA claims. Moving Defendants never argued that they did not know how much Plaintiffs were being paid, merely that they did not pay them. Plaintiffs, however, have presented sufficient evidence to create an issue of fact about whether Moving Defendants knew or should have known how much Plaintiffs were being paid. Based on evidence of the following facts: that Liberty paid the Contracting Corporations by the piece; that they set firm deadlines by when the garments needed to be completed; that Liberty representatives visited the factory and saw the workers who stitched and finished the garments; and that one Plaintiff complained about the workers' wages; it is not apparent that no rational trier of fact could find in favor of the nonmoving party because the evidence to support its case is so slight.
Moving Defendants have stated that Liberty, a manufacturer, contracted with Yam to perform services including sewing, cutting, and finishing patterns for Liberty. Nigri Aff. ¶ 9. It is therefore clear from the record that Moving Defendants are the types of entities that would be covered by Sections 345-a(1) and 340(c), and that the definition of employer under the FLSA is inapplicable in this context.
For all these reasons, this Court concludes that Plaintiffs have presented sufficient evidence to defeat Moving Defendants' motion for summary judgment on the New York Labor Law claims. Accordingly, both Moving Defendants' and Plaintiffs' motions for summary judgment on the New York Labor Law claims are DENIED.
C. Pendent Jurisdiction
A district court retains the discretion to exercise pendant jurisdiction and entertain state law claims once all federal claims have been dismissed see Enercomp, Inc. v. McCorhill Publ'g, 873 F.2d 536, 545 (2d Cir. 1989). "Needless decisions of state law should be avoided both as a matter of comity and to promote justice between the parties, by procuring for them a surer-footed reading of applicable law. Certainly, if the federal claims are dismissed before trial . . . the state claims should be dismissed as well." United Mine Workers v. Gibbs, 383 U.S. 715, 726 (1966). Because it appears that as of yet, no state court has interpreted section 345-a of New York Labor Law, this Court declines to exercise supplemental jurisdiction over Plaintiffs pendent state law claims.
V. CONCLUSION
For the reasons stated above:
• Moving Defendants' motion for summary judgment on Plaintiffs' claims under the FLSA and NYCRR is GRANTED, and such claims are hereby DISMISSED;
• Moving Defendants' motion for summary judgment on the New York Labor Law claims is DENIED;
• Plaintiffs' motion for summary judgment is DENIED;
• Plaintiffs' New York Labor Law claims are dismissed without prejudice.
The Clerk of the Court is hereby directed to mark this action closed.