Johnson v. Queen's Nail Art, Inc.

Background

Hyelyn Johnson and Chae E. Ghim sued Queen’s Nail Art, Inc., doing business as Dashing Diva Nail Salon, and Seung Ae Choi. The plaintiffs sought unpaid minimum and overtime wages and gratuities under the Fair Labor Standards Act, a federal wage law, and New York Labor Law. They also sought liquidated damages, interest, attorneys’ fees, and costs.

Before the lawsuit, Seung Choi called the New York office of Ryan Kim Law, P.C., seeking employment-law advice. She spoke for about 40 minutes with Jia Choi, a paralegal who screened calls for the firm. The parties agreed that Seung Choi said she operated a New York nail salon and wanted to know whether her employees could sue her. They disputed whether she disclosed the salon’s name and how much detail she provided about its employment practices.

Seung Choi said she discussed the salon’s methods for recording work hours, maintaining records, distributing cash and credit-card tips, paying wages, and using employment forms and wage notices. She also said she discussed issues involving current and former employees, including Johnson. Jia Choi acknowledged discussing wage practices and records management but did not recall discussions about several specific forms or detailed tip-distribution practices. Jia Choi stated that she told the caller that, if the information provided was accurate, the employees were unlikely to succeed on claims against her.

Seung Choi never spoke directly with Ryan Kim, and neither she nor the defendants retained or paid Kim or his firm. Johnson later contacted the firm, but Jia Choi did not recognize that call as involving the same matter as the earlier anonymous call.

Motion to Disqualify

Defendants moved to disqualify Ryan Kim Law, P.C. from representing plaintiffs. They argued that Seung Choi’s call made the firm aware of confidential information that could prejudice defendants in the wage-and-hour lawsuit.

The court explained that federal courts may disqualify lawyers to protect the fairness of the legal process, but motions seeking disqualification receive strict scrutiny because they can be used tactically. The party seeking disqualification has a heavy burden to show specifically how substantial prejudice could result.

The court applied New York Rule of Professional Conduct 1.18, which concerns duties to people who consult a lawyer about possibly forming a lawyer-client relationship. Under that rule, a lawyer generally may not represent an opposing party in the same or a related matter when the lawyer received information from the prospective client that could be significantly harmful if used in the case.

The court distinguished significantly harmful information—such as an undisclosed settlement strategy, settlement limit, or views about the strengths and weaknesses of the litigation—from information that is public, concerns the history of the dispute, or is likely to be disclosed during discovery.

Ruling

Judge Vernon S. Broderick found that, even accepting Seung Choi’s account of the call, the information she described was factual information about the business and the dispute, not significantly harmful confidential information. The court stated that the defendants presumably knew the factual circumstances underlying the litigation. It also found that asking for advice about changing business practices or asking whether employees might have viable claims did not itself disclose prejudicial information.

The court separately reviewed Seung Choi’s additional affidavit in private because it contained further details about the alleged harmful information. That submission did not change the court’s conclusion. The court held that Seung Choi did not disclose potentially harmful information to Jia Choi.

Accordingly, defendants’ motion to disqualify plaintiffs’ counsel was DENIED. The court ordered defendants to submit, by January 31, 2025, a letter stating their position on continued redaction of the portion of the opinion discussing the private affidavit. The clerk was directed to terminate the open motion at Document 16.