Bielefeldt v. Intelligence

Background

Jake Bielefeldt and Simon Firestone brought a putative class action against Gro Intelligence, Inc. under the federal Worker Adjustment and Retraining Notification Act (WARN Act), the New York Worker Adjustment and Retraining Notification Act (NY WARN Act), and the New York Wage Theft Protection Act (WTPA), as incorporated into the New York Labor Law.

They alleged that Gro terminated them without advance written notice during a mass layoff or plant closing between February 1 and March 1, 2024. They also alleged that Gro terminated approximately 90 other employees, failed to provide required post-termination pay and benefits during the notice period, and failed to provide compliant wage statements during several months before the terminations.

Gro’s counsel withdrew before Gro filed an answer. After Gro failed to retain new counsel or respond to the court’s order concerning default judgment, District Judge John G. Koeltl entered a default judgment in favor of Bielefeldt and Firestone on November 7, 2024. No class was certified, so the damages inquest addressed only those two plaintiffs. Judge Koeltl referred the damages issue to Magistrate Judge Robyn F. Tarnofsky.

Liability

Because Gro defaulted, the report treated the well-pleaded factual allegations as true, except as to the amount of damages. The report concluded that the allegations established liability under both the federal WARN Act and the NY WARN Act. It found that Gro met the applicable employer definitions, that the terminations qualified as a plant closing, and that Bielefeldt and Firestone experienced covered employment losses without the required notice.

The report reached a different conclusion on the WTPA claim. It found that the plaintiffs’ alleged confusion about their pay, tax information, and wage statements did not establish the concrete injury required for constitutional standing. Firestone’s allegation that he was not paid for accrued paid time off also did not connect that loss to the wage-statement violations. The report therefore recommended denying WTPA damages for lack of standing.

Damages

The report calculated WARN Act damages under the federal statute because the federal and New York statutes use the same damages formula and recovery under both statutes for the same conduct is not permitted. It recommended $38,320.62 for Firestone, consisting of $35,538.72 in back pay and $2,781.90 for accrued paid time off during the 60-day violation period. It recommended $26,654.88 in back pay for Bielefeldt. It declined to award the requested health-insurance and other benefit damages because the plaintiffs did not provide concrete evidence establishing their value.

Although the report rejected the WTPA damages request for lack of standing, it stated that, if that conclusion were rejected, the alleged violations would support the statutory maximum of $5,000 for each plaintiff, or $10,000 total.

Attorneys’ Fees and Costs

The plaintiffs requested $165,677 in attorneys’ fees and $2,574.07 in costs. The report found that the requested hourly rates were too high and that the attorneys spent excessive time on internal meetings, class-related work, and other tasks after Gro defaulted. It recommended reducing hourly rates and billed hours and recommended an attorneys’ fee award of $18,727.25. It found the requested $2,574.07 in filing, service, postage, printing, and electronic-record costs reasonable.

Recommendation and Procedure

The conclusion recommends granting the motion for default judgment and entering judgment against Gro in favor of Bielefeldt and Firestone for $82,400.42, stated as $64,975.50 in WARN Act damages, $18,727.25 in attorneys’ fees, and $2,574.07 in costs. The parties were given 14 days after service to file objections, which would be addressed by District Judge John G. Koeltl.