Yuwono v. Jade Eatery & Lounge LLC

Background

Sandy Yuwono and Uvaldo Torres sued their former employer, KFG Hospitality Group LLC, doing business as Jade Eatery & Lounge LLC, along with Arun Kumar, Richard Liao, and Sam Khandhorov. They brought claims under the Fair Labor Standards Act (FLSA) and New York Labor Law on behalf of themselves and proposed groups of similarly affected workers.

The complaint alleges that the defendants failed to pay required minimum wages and overtime, improperly claimed tip credits, delayed wage payments, and engaged in “time shaving.” Yuwono alleged that he worked 64.5 hours per week and was paid a tip-credit rate instead of the required overtime rate for hours over 40. Torres alleged that he worked 48 hours per week but was paid $100 per day regardless of the hours worked, including overtime hours.

The plaintiffs also brought claims under New York’s Wage Theft Prevention Act (WTPA). They alleged that the defendants did not provide proper hiring notices or wage statements with required information, including accurate pay rates, regular and overtime hours, and tip-credit allowances. They further alleged that the missing or inaccurate information prevented them from determining whether they were underpaid, delayed payment of wages, and hindered their ability to challenge the defendants’ wage practices.

The Motion to Dismiss

The defendants moved under Federal Rule of Civil Procedure 12(b)(1), which permits dismissal when a federal court lacks subject-matter jurisdiction. They argued that the plaintiffs lacked Article III standing—the constitutional requirement that a plaintiff show a concrete injury connected to the defendant’s conduct and likely to be remedied by a court order.

The defendants argued that the plaintiffs had alleged only technical violations of the WTPA and that their claimed financial harm was too speculative. They also argued that the plaintiffs’ alleged injury was not distinct from the unpaid wages claimed under the FLSA and other New York wage laws. The defendants contended that the sample paycheck attached to the complaint contradicted the plaintiffs’ assertion that their wage statements were inadequate.

Court’s Analysis

Judge Gardephe concluded that the sample paycheck supported, rather than undermined, the WTPA allegations. Although it listed the total amount paid, total hours, and a tip amount, it did not list regular or overtime pay rates, a tip-credit allowance, or whether the wages were gross or net. Other sample paychecks submitted by the plaintiffs listed a flat payment and pay period but no hours or pay rates.

The court also relied on allegations that Torres was paid for multiple weeks of work in a single paycheck, allegedly in violation of New York’s weekly-payment requirement. The court stated that delayed payment itself can constitute concrete harm because it deprives an employee of the timely use of money owed.

The court found that the alleged inaccurate wage statements were linked to specific financial injuries. According to the complaint, the statements did not accurately show hours worked, overtime rates, or tip-credit information. This allegedly helped conceal time shaving and prevented the plaintiffs from determining whether they were underpaid and seeking the precise amount owed. The court held that these allegations went beyond a bare statutory violation and plausibly showed a concrete injury at the motion-to-dismiss stage.

The court further held that the plaintiffs did not have to allege harm separate from their alleged minimum-wage, overtime, or spread-of-hours underpayments. The court noted that the Second Circuit had rejected the argument that a WTPA plaintiff must show an injury greater than those wage violations.

The court did not rely on a separate assertion first raised in the plaintiffs’ opposition brief—that the allegedly defective wage statements reduced their Social Security benefits—because a brief opposing dismissal cannot amend the complaint.

Disposition

The court denied the defendants’ motion to dismiss the Second Amended Complaint. The ruling allowed the WTPA claims to proceed past this motion; it did not decide the ultimate truth of the plaintiffs’ wage or notice allegations.