Cortez v. Band Name 99 Cents & Up Corp

Background

Jose Cortez sued Brand Name 99 Cents & Up Corp. under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). He alleged that he worked as a clerk from January 15, 2024, through June 28, 2024, arranging and carrying merchandise and performing other assigned tasks. He alleged that he worked six days per week, generally from 9:00 a.m. to 9:00 p.m., for approximately 69 hours per week, and received a flat payment of $600 per week.

Cortez alleged that Brand Name 99 Cents & Up did not pay a minimum wage or overtime premium for hours worked over 40 per week. He also alleged that the company did not provide accurate wage statements or written wage notices. The opinion states that the company was served, that the Clerk entered a certificate of default on October 16, 2024, and that the company never appeared or responded.

The case initially sought class or collective treatment, but Cortez requested default judgment only for himself. The court therefore treated the request for class certification as abandoned. Cortez also did not pursue recordkeeping and spread-of-hours claims in his default-judgment motion, so the court treated those claims as abandoned. He affirmatively waived attorney’s fees.

Default-judgment standard

Under Federal Rule of Civil Procedure 55, default judgment has two steps: entry of default after a party fails to defend, followed by a judgment awarding relief if the well-pleaded allegations establish legal liability. A default admits well-pleaded factual allegations, but it does not automatically establish legal conclusions or the amount of damages. The court therefore independently considered whether the allegations established valid claims and whether Cortez supported his damages request.

Liability

The court found that Cortez qualified as an employee and that Brand Name 99 Cents & Up qualified as his employer under both the FLSA and NYLL. For the FLSA, the court found sufficient allegations that the company was engaged in interstate commerce because Cortez handled goods made or assembled outside New York and the company had annual gross sales of at least $500,000.

The court held that the allegations established violations of the minimum-wage and overtime provisions. Cortez alleged that he worked approximately 69 hours per week but was paid only $600 per week and received no overtime premium. The court concluded that the company violated the NYLL’s minimum-wage requirements and both the FLSA’s and NYLL’s overtime requirements.

The court also addressed standing, meaning whether Cortez had shown a concrete injury allowing him to pursue his wage-notice and wage-statement claims in federal court. Applying Second Circuit precedent, the court concluded that Cortez sufficiently alleged that the missing notices and inaccurate statements prevented him from accurately calculating his wages and understanding and asserting his wage rights. The court therefore found violations of the NYLL provisions governing wage notices and wage statements.

Damages

The court elected to calculate the wage award under the NYLL because it provided the higher minimum wage, while avoiding duplicate recovery under both statutes. Because Brand Name 99 Cents & Up did not appear or provide records, the court accepted Cortez’s sworn estimates of his work schedule and pay.

The court awarded $17,348.57 in back wages. It also awarded $17,348.57 in liquidated damages, finding that the company had not appeared or presented a good-faith defense to the underpayment claims.

For the wage-notice violation, the court awarded the statutory maximum of $5,000 under NYLL § 195(1). For the wage-statement violation, it awarded the statutory maximum of $5,000 under NYLL § 195(3). The court awarded $484 in costs, consisting of a $405 filing fee and a $79 service-of-process fee. Cortez had waived attorney’s fees.

The court awarded prejudgment interest on the back wages at New York’s 9% statutory rate beginning April 7, 2024, which it identified as the midpoint of Cortez’s employment. It also awarded post-judgment interest under 28 U.S.C. § 1961 from entry of judgment until payment.

Disposition

The court granted the motion for default judgment. It directed the Clerk of Court to enter judgment for Cortez and close the case. The judgment provides that if amounts remain unpaid after the specified 90-day period, the total judgment will automatically increase by 15%, subject to the conditions stated in the judgment.