Collado v. Adolfo Meat Market Corp.

Background

Juan Collado and Jenny Sanchez brought claims individually and on behalf of others similarly situated against Adolfo Meat Market Corp. (AMMC) and Eucebio Adolfo Martinez. They alleged violations of the Fair Labor Standards Act (FLSA), the New York Labor Law (NYLL), and 26 U.S.C. § 7434. The claims involved unpaid overtime, failure to pay wages on time, missing or inaccurate wage notices and wage statements, fraudulent wage information returns, and retaliation.

Martinez advised the court that he had started bankruptcy proceedings, and the court stayed the case as to him while discovery continued against AMMC. After AMMC’s counsel withdrew, the court reminded AMMC that a corporation cannot litigate without a lawyer and warned that default judgment could follow if it did not retain counsel. AMMC did not retain counsel, did not respond to the court’s order to show cause, and was entered into default.

Court’s Analysis

Under Federal Rule of Civil Procedure 55, default judgment requires both an entry of default and a later court decision granting judgment. A default admits well-pleaded factual allegations establishing liability, but the court must still determine whether those allegations provide a legal basis for relief.

The court held that the allegations supported the overtime claims under both the FLSA and the NYLL. Collado alleged working approximately 78 hours per week from January 2012 through February 2020 and approximately 74 hours per week from May 2020 through September 2021, while receiving fixed weekly salaries during portions of that period. Sanchez alleged working between approximately 41 and 84.5 hours per week during different periods from March 2015 through September 2021, also while receiving fixed weekly salaries. The court concluded that these allegations sufficiently described overtime work and unpaid overtime wages.

The court also held AMMC liable under the NYLL for allegedly failing to pay earned weekly wages within the required time. Regarding the fraudulent-information-return claim, the court concluded that the allegations sufficiently established that defendants willfully reported on the plaintiffs’ Internal Revenue Service W-2 forms only the wages paid by check, rather than the amounts paid in cash.

For the wage-notice and wage-statement claims, the court explained that a plaintiff must show harm resulting from the missing or defective information, not merely an informational injury. Because the plaintiffs did not allege downstream harm or a causal connection between the notices or statements and their lost wages, the court held that they lacked standing to pursue those claims.

The court also concluded that the allegations supported retaliation claims under both the FLSA and the NYLL. The plaintiffs alleged that defendants’ counterclaims for fraud, conversion, and unjust enrichment were baseless and were filed to retaliate against them for bringing the lawsuit and to cause distress and expenses.

Ruling and Next Steps

The court granted in part and denied in part default judgment against AMMC. It granted default judgment on the claims for unpaid overtime under the FLSA, unpaid overtime under the NYLL, failure to pay timely wages under the NYLL, fraudulent filing of information returns under 26 U.S.C. § 7434, retaliation under the FLSA, and retaliation under the NYLL.

The court denied default judgment on the NYLL wage-notice and wage-statement claims and dismissed those claims for lack of standing. It referred the matter to Magistrate Judge Willis for an inquest—an additional proceeding to determine damages, attorneys’ fees, and costs.

As to Martinez, the court stated that it assumed the plaintiffs were no longer pursuing their claims based on a submission identified as ECF No. 104. It directed the plaintiffs to respond by March 3, 2025 if they intended to continue those claims. The opinion states that the claims against Martinez would be dismissed if the plaintiffs made no submission or indicated that they were not pursuing them.