Cazares v. 2898 Bagel & Bakery Corp.

Background

The twelve plaintiffs were former employees of 2898 Bagel & Bakery Corp., doing business as Nussbaum & Wu, and Shlomo Sela. They worked in positions including sandwich maker, smoothie maker, delivery worker, cook, cook assistant, and cashier. They alleged violations of the federal Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL), including failure to pay minimum and overtime wages, failure to pay spread-of-hours compensation, failure to provide required wage notices and statements, failure to keep required records, failure to reimburse certain work-related costs, unlawful wage deductions, retention of gratuities, and violations of New York’s timely-payment provision.

2898 Bagel & Bakery Corp. and Shlomo Sela were served but did not defend the action. The Clerk entered certificates of default against both defendants. Natalie Gil had previously been dismissed because she was not served with the amended complaint. The plaintiffs then moved for default judgment and their counsel requested attorneys’ fees and costs.

Statutes of limitations and relation back

The Court applied a three-year limitations period to the FLSA claims because the default supported a finding of willfulness, and a six-year limitations period to the NYLL claims. It held that the claims against Sela related back to the original complaint because the claims were identical, Sela received timely notice, and he should have known that he was omitted from the original complaint because of a mistake about his identity. The liability judgment therefore covered FLSA violations occurring on or after June 30, 2015, and NYLL violations occurring on or after June 30, 2012.

Liability rulings

A default admits well-pleaded factual allegations, but it does not automatically establish legal liability. The Court concluded that the allegations were sufficient to establish that the plaintiffs were employees and that 2898 Bagel & Bakery Corp. and Sela were joint employers under the FLSA. The allegations also sufficiently showed that the business was involved in interstate commerce and that the plaintiffs worked hours for which they were not paid the required minimum or overtime wages.

The Court entered judgment as to liability for:

- FLSA and NYLL minimum-wage claims; - FLSA and NYLL overtime claims; - NYLL spread-of-hours claims for Ascencion Cazares, Fanny Jisselle Lizardo Fabre, and Jose Cedano; - NYLL notice, recordkeeping, and wage-statement claims; and - NYLL unlawful wage-deduction claims involving Fanny Jisselle Lizardo Fabre, Jose Cedano, and Wendy Patricia Damas, and gratuity-retention claims involving Gabino Romano Hernandez.

The Court did not award default judgment on the tools-of-the-trade claims because the allegations did not adequately explain the nature and cost of the items, why they were required for the work, or how their cost reduced the plaintiffs’ required minimum or overtime wages. The Court also treated the NYLL timely-payment claims under Section 191 as duplicative of the minimum-wage claims for the same unpaid hours and allowed default judgment only on the minimum-wage claims.

Damages, fees, and disposition

The Court did not determine the amount of damages. It found errors in the plaintiffs’ calculations, including the use of periods outside the applicable limitations periods and the inclusion of deduction damages for plaintiffs whose allegations did not support those damages. The Court therefore referred the matter to a Magistrate Judge for an inquest to determine damages and to calculate attorneys’ fees and costs.

Judge Alison J. Nathan’s final disposition was that the plaintiffs’ motion for default judgment was GRANTED in part. The Court entered judgment concerning the defendants’ liability for the specified claims and referred damages, fees, and costs for further proceedings.