Hong v. JP White Plains, Inc.

Background

Yingcai Hong brought claims under the Fair Labor Standards Act (FLSA) and New York Labor Law against JP White Plains, Inc., Haiku @ WP Inc., Haiku Bistro 149, Inc., and Soonwah Lee, also known as Michael Lee. Hong alleged that the defendants operated meal and transportation programs that resulted in wage deductions. He claimed employees were sometimes required to work through meal breaks while automatic deductions were still taken, and that employees were charged for transportation even when they continued working while using the transportation program.

Hong moved under Federal Rule of Civil Procedure 23 to certify a class of all non-managerial and non-exempt workers employed by the defendants from May 31, 2013, through the date of the decision. He sought certification for his FLSA and New York Labor Law claims, designation as class representative, approval and distribution of notice, and posting of the notice at the defendants’ workplace.

The court stated that FLSA claims use a separate process under 29 U.S.C. § 216(b) to proceed as a collective action. It therefore addressed only certification of the New York Labor Law claims under Rule 23. The court had previously conditionally certified a group of drivers based on a lower evidentiary standard, but the current motion required Hong to prove the Rule 23 requirements by a preponderance of the evidence.

Legal standard

Rule 23(a) requires a proposed class to satisfy four requirements: enough members that joining each person individually would be impractical; common legal or factual questions; claims by the class representative that are typical of the class’s claims; and a representative who will fairly and adequately protect the class’s interests. Because Hong invoked Rule 23(b)(3), he also had to show that common questions predominated over individual questions and that a class action was the best available method for resolving the dispute.

Non-driver proposed class

The court found evidence that meal credits had been deducted from some employees’ wages, including pay stubs, timesheets, wage notices, and deposition testimony. But the court said the relevant question was which employees had improper deductions—deductions taken when they did not take a meal break. Hong did not provide proof that a common policy caused improper deductions across the proposed class. Instead, he inferred that other employees were treated improperly because he alleged that he had been treated improperly. The court characterized that reasoning as speculation and conjecture.

The court also rejected the argument that the defendants’ failure to keep better records proved improper deductions. Lee testified that employees could report whether they took their meal breaks and that deductions could then be removed and timesheets and paychecks adjusted. The court stated that automatic deductions are not automatically illegal and that Hong had not provided enough evidence that deductions remained uncorrected or that a common unlawful policy affected enough employees.

The court reached a similar conclusion about the transportation program. Hong argued that approximately 75 percent of the workforce used the program because Lee estimated that 25 to 30 percent of employees lived locally. The court said that estimate did not establish that the remaining employees used the program or that they suffered improper wage deductions. The court concluded that Hong failed to establish numerosity, commonality, and typicality for the proposed class of non-managerial and non-exempt employees.

Driver class

Hong alternatively sought certification of a class of drivers. He claimed that 44 drivers had been treated similarly. The court explained that the earlier conditional certification required only a modest factual showing, while Rule 23 certification required significant and convincing evidence. Hong offered no additional evidence showing that the drivers were subject to a common policy denying them proper wages. The existence of automatic meal or transportation deductions, by itself, did not show that employees were denied legally required wages.

The court also found that only four drivers had opted into the class, in addition to Hong, for a total of five drivers alleging improper deductions. Because the proposed class had five members and Hong showed no extraordinary circumstances making individual lawsuits impractical, the court found that the numerosity requirement was not met. The court also found that Hong had not established commonality or typicality for the driver class.

Disposition

The court DENIED Plaintiff’s motion for class certification. It did not certify either the broader proposed class or the alternative driver class. The opinion also set dates for letters seeking permission to file a potentially case-resolving motion and directed the Clerk of Court to terminate the motion at ECF No. 161.