Chen v. H.B. Restaurant Group, Inc.

Background

Shiqiu Chen and Changren Zou sued H.B. Restaurant Group, Inc., SG 98 Restaurant Group, Inc., J & K Restaurant Group, Inc., related restaurant entities, Jenny Shuchen Wu, and Zun Bi Chen. They sought unpaid minimum and overtime wages and other damages under the Fair Labor Standards Act, a federal wage law, and the New York Labor Law.

The case was tried to the court over three days. The central issue was whether the plaintiffs worked for restaurants owned, managed, or controlled by the defendants and, if so, whether they experienced unpaid wages, unpaid overtime, or another wage-and-hour violation.

Evidence and findings

Zou testified that he worked at Hunan Balcony, Szechuan Garden, and A New Saigon, and that Wu and Zun Bi Chen supervised or managed his work. Chen testified that he worked at A New Saigon and sometimes made deliveries for Szechuan Garden, and that Wu, Zun Bi Chen, and other managers supervised him.

Wu testified that she previously owned and operated Hunan Balcony, later operated a restaurant at a different location under the names Pitaya, Szechuan Gourmet, and Szechuan Garden, and did not own or manage A New Saigon. She acknowledged that Zou worked part-time at Szechuan Garden but denied employing Chen. She also denied that workers were shared between the restaurants.

The court found both plaintiffs not credible. It cited inconsistencies between their trial and deposition testimony and inconsistencies concerning their hours, pay, work locations, and Wu’s involvement. The court found Wu’s testimony highly credible and found that payroll records supported only Zou’s part-time work at Szechuan Garden.

The court also found that the plaintiffs did not provide sufficient evidence connecting Wu to A New Saigon or proving that the restaurants operated as a joint enterprise. The opinion states that Zun Bi Chen had not answered the amended complaint or appeared, and that the plaintiffs had not asked for a default judgment against him; the decision therefore focused on Wu and the appearing defendants.

Legal standard and ruling

To prevail under the Fair Labor Standards Act and New York Labor Law, the plaintiffs had to prove by a preponderance of the evidence—that is, show that their claims were more likely true than not—that they performed work for which they were not properly paid and that the defendants were legally responsible. The court explained that an individual may be an employer based on factors such as the power to hire and fire, control over schedules or working conditions, control over pay, maintenance of employment records, and operational control.

Judge Robert W. Lehrburger concluded that the plaintiffs did not prove that either of them worked more than 40 hours per week, received less than the minimum wage, or suffered another wage-and-hour violation while working for a restaurant owned, managed, or controlled by an appearing defendant. The court held that there was no basis for individual or joint liability, directed the Clerk to enter judgment in favor of the defendants, and ordered the case closed.