Rodriguez v. Lunita's Cafe and Deli Corp

Background

Betty Rodriguez alleged that Lunita’s Cafe and Deli Corp. and Pablo Luna violated the Fair Labor Standards Act (FLSA) and New York Labor Law by failing to pay minimum wage and overtime and by failing to provide required wage notices and wage statements. The opinion states that Luna was Lunita’s president and sole shareholder.

Rodriguez worked at the restaurant from August 2015 through September 6, 2020. She testified that she initially was told she would receive $9.50 per hour, but after her first year she was paid a flat $750 per week. She also testified that she received an additional flat $100 when she worked extra shifts. The defendants paid her partly in cash and partly by check.

The defendants moved for summary judgment, which is a request to resolve a case without a trial when there is no genuine dispute about a material fact. They argued that Lunita’s was not covered by the FLSA because its annual gross sales were below $500,000. Alternatively, they requested rulings under Federal Rule of Civil Procedure 56(g) establishing that Rodriguez typically worked no more than 66 hours per week and was paid hourly rather than weekly.

The motion was referred to Magistrate Judge Henry J. Ricardo. His October 31, 2024 Report and Recommendation recommended denying summary judgment, granting the Rule 56(g) request concerning Rodriguez’s typical work schedule, and denying the Rule 56(g) request concerning whether she was paid hourly or weekly. No party objected.

FLSA Coverage

The FLSA’s enterprise-coverage test requires, among other things, that an employer have annual gross sales of at least $500,000 and that its employees handle goods or materials moved in or produced for commerce. The defendants did not dispute the latter requirement. The court therefore focused on whether the $500,000 sales threshold was met during the relevant period.

The defendants submitted tax returns, profit-and-loss statements, bank statements, and Luna’s affidavit asserting that Lunita’s annual sales were below the threshold. The court found material factual disputes because Luna acknowledged using cash from the register to pay vendors, meaning some cash receipts would not appear in the tax returns or bank statements. The court also noted that the wage amounts reported on the tax returns did not correspond to Rodriguez’s testimony about her $750 weekly pay or to evidence that other employees worked at the restaurant.

Rodriguez and Hector Lopez submitted declarations estimating the restaurant’s meal sales and prices. The court concluded that, viewed conservatively, Rodriguez’s estimates indicated annual sales of about $569,920, while Lopez’s estimates were higher. The court held that a reasonable fact finder could credit this evidence over the defendants’ financial records.

The defendants argued that the declarations should be excluded because Rodriguez and Lopez had not been identified in response to a discovery question about people with knowledge of sales, lacked sufficient personal knowledge, and gave inconsistent accounts. The court agreed with Judge Ricardo that excluding the evidence would not be warranted. Rodriguez had been questioned during her deposition about the number of meals served and prices, the absence of a trial date left room for additional discovery, and the alleged inconsistencies affected the weight of the evidence rather than whether it could be considered. The court also found that their work as cooks, and in some circumstances at the buffet or cash register, could give them enough personal knowledge to estimate sales.

Because the evidence created a genuine dispute about whether Lunita’s reached the FLSA sales threshold, the court denied summary judgment on the defendants’ FLSA-coverage argument.

Rule 56(g) Requests

Rule 56(g) allows a court that does not grant all requested summary-judgment relief to treat a material fact as established when that fact is not genuinely disputed.

The court granted the defendants’ request for a Rule 56(g) order stating that Rodriguez’s typical work schedule did not exceed 66 hours per week. Although the complaint alleged that she regularly worked 74 to 77 hours per week, Rodriguez testified that she typically worked 54 hours per week during 2018 and 66 hours per week afterward, and her response to the defendants’ factual statement admitted those limits. The court noted that this finding concerned her typical schedule, not whether she ever worked more than 66 hours in a particular week.

The court denied the defendants’ request for a Rule 56(g) order stating that Rodriguez was paid hourly rather than weekly. Rodriguez testified both that she was initially promised an hourly rate and that Luna later told her she would be paid $750 per week. Luna testified that he paid an hourly rate and additional cash for extra hours, and a paystub showed an hourly rate of $10.00 in February 2019. But Rodriguez’s testimony that she received a flat $100 for extra shifts could support a finding that she was paid a fixed weekly amount plus a fixed sum for additional shifts. The court therefore found a genuine factual dispute on the pay basis.

Disposition

Judge Gardephe adopted Judge Ricardo’s Report and Recommendation in its entirety. The defendants’ motion for summary judgment was denied. The defendants’ Rule 56(g) request was granted as to Rodriguez’s typical work schedule, which the court stated did not exceed 66 hours per week, and denied as to whether she was paid on an hourly or weekly basis. The Clerk of Court was directed to terminate the motion.