Hegazy v. The Halal Guys, Inc.

Background

Plaintiffs are former employees who worked as food servers and food-cart workers for the defendants. They brought claims under the Fair Labor Standards Act and the New York Labor Law. The operative pleading was the Second Amended Complaint. The court had previously authorized notice to potential members of the Fair Labor Standards Act collective action, and the opt-in period closed on December 12, 2022.

The plaintiffs later informed the defendants and the court that many opt-in plaintiffs had claims under the New York Labor Law and New York City law. The parties jointly requested extensions of the discovery deadlines because the plaintiffs intended to seek leave to amend and some proposed amendments concerned people who had not yet been deposed.

Proposed amendments

The proposed Third Amended Complaint would: correct the spelling of certain parties’ names; remove a named plaintiff who had withdrawn; remove the claim for failure to pay uniform costs; add 23 opt-in plaintiffs to the caption; and add a cause of action under the New York City Fair Workweek Law.

Legal standard

Federal Rule of Civil Procedure 15(a)(2) generally directs courts to freely allow amendment of a pleading when justice requires. A court may deny leave for reasons such as undue delay, bad faith, undue prejudice, or a futile amendment. Prejudice can include requiring significant additional discovery and trial preparation or significantly delaying the case.

Court’s reasoning

The court rejected the defendants’ argument that the plaintiffs had waited too long. It explained that waiting until after the opt-in period in a Fair Labor Standards Act collective action can be reasonable. Less than 90 days after the opt-in period ended, the plaintiffs told the defendants and the court that they intended to add claims under the New York Labor Law and New York City law after completing certain discovery. The defendants did not object at that time and participated in requesting extensions connected to the anticipated amendment.

The court also rejected the claim of undue prejudice. Although the earlier complaints did not specifically identify the Fair Workweek Law claims, the defendants had notice for at least five months that the plaintiffs intended to add related New York City-law claims. Discovery remained open, no dispositive motions had been filed, and the parties had jointly arranged for depositions and fact discovery to continue after the court decided the amendment motion. The court stated that the possibility of additional time, effort, or expense for discovery did not by itself establish undue prejudice.

The court further concluded that requiring the plaintiffs to bring the Fair Workweek Law claims in a separate action would be unnecessarily duplicative and could require the parties to repeat many of the same efforts.

Disposition

The court granted the plaintiffs’ motion for leave to amend the Complaint. It ordered the plaintiffs to file the Third Amended Complaint within one week of the order. It also ordered the parties to complete depositions within 60 days and fact discovery within 90 days. The order addressed permission to amend the pleading; it did not decide the ultimate merits of the wage-and-hour or Fair Workweek Law claims.