Newman v. ASA College, Inc.

Background

Barry Newman worked as Chair of ASA College, Inc.’s Massage Therapy Department beginning in or about April 2018. The opinion states that he was promised an annual salary of $62,000 but received less than that from 2019 through 2022. He also alleged that ASA required him to work 45 to 50 hours per week while recording fewer than 40 hours, failed to pay him for work performed after December 4, 2022, did not pay accrued vacation time, made an unauthorized $240 deduction, and sometimes paid wages late.

Newman sued ASA, Alexander Shchegol, and Jose Valencia under the Fair Labor Standards Act, the New York Labor Law, and state contract law. The defendants were served but did not appear. After a hearing at which only Newman’s counsel appeared, Judge Failla entered a default judgment and referred the case to Magistrate Judge Robert W. Lehrburger to determine damages. Lehrburger issued a report recommending awards for unpaid wages, additional damages, breach of contract, interest, attorneys’ fees, and costs. No party filed objections.

Court’s Review and Ruling

Because there were no objections, Judge Failla reviewed the report for clear error, meaning an obvious mistake in its factual or legal reasoning. She found no error and adopted the report in its entirety.

The court accepted the conclusion that ASA, Shchegol, and Valencia were Newman’s employers under the wage laws and were jointly and severally liable. The court also accepted the conclusion that Newman was not exempt from overtime protections. Although he held the position of department chair and had been promised a salary, the record did not show that he directed at least two employees or had the required hiring or firing authority, and he was actually paid on an hourly basis.

The court applied the New York Labor Law for the damages calculations because it provided equal or greater recovery than the federal law for the claims at issue. It awarded $12,196.50 in unpaid wages, consisting of unpaid regular and overtime wages, vacation pay, and an unlawful deduction. It awarded an additional $12,196.50 in liquidated damages, a statutory additional payment designed to compensate or penalize wage violations. It also awarded $10,865.40 in liquidated damages for untimely wage payments.

The court found that Newman had an oral employment contract calling for $62,000 per year and awarded $25,002.39 for breach of contract after reducing the contract damages to avoid duplicating the wage-law recovery. It awarded nine-percent prejudgment interest on $12,196.50 in unpaid wages beginning January 15, 2023, and nine-percent prejudgment interest on $25,002.39 in contract damages beginning January 1, 2021. It also awarded $5,240 in attorneys’ fees and $779.80 in compensable costs.

Disposition

Judge Katherine Polk Failla ordered the Clerk of Court to enter judgment in Newman’s favor and against ASA College, Inc., Alexander Shchegol, and Jose Valencia, jointly and severally, for the amounts listed above. She directed the Clerk to terminate pending motions, adjourn remaining dates, and close the case. The opinion notes that the report contained stray references to $12,965.50 for wage liquidated damages, which Judge Failla treated as a typographical error; the adopted recommendation and final judgment use $12,196.50.