Jung v. Gina Group, Inc.

Background

Hyeyoon Jung sued Gina Group, LLC under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL), alleging unpaid overtime and failure to provide a required wage notice. She also brought claims under the New York State Human Rights Law (NYSHRL) and New York City Human Rights Law (NYCHRL), alleging discrimination and wrongful termination based on her race and national origin. Jung asserted the wage claims individually and on behalf of other workers.

Jung alleged that she worked as a shoe designer for Gina Group from August 11, 2015, through June 28, 2019. She claimed that she worked 45 hours per week during several periods and 52 hours per week from September 2017 to January 2019. During those periods, she received fixed weekly wages and alleged that Gina Group paid nothing for work beyond 40 hours per week. She also alleged that Gina Group never gave her a wage notice in English or Korean stating her pay rate, the basis for her pay, regular paydays, and other required information at hiring.

For her discrimination claims, Jung alleged that Gina Group denied her request for a one-day vacation while approving week-long vacation requests from two non-Korean designers. She also alleged that Gina Group terminated her for stated performance reasons despite salary increases and positive performance reviews, while other non-Korean designers were not terminated.

Rule 12(b)(6) Standard

Gina Group moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts to state a legally plausible claim. The court was required to accept the complaint’s factual allegations as true and draw reasonable inferences in Jung’s favor at this stage.

Overtime Claims

The court held that Jung plausibly alleged overtime violations under both the FLSA and NYLL. Both laws generally require overtime pay at one and one-half times the regular rate for work beyond 40 hours in a workweek. Jung specifically alleged the number of hours she worked, the fixed weekly wages she received, and that she was not paid for hours over 40.

The court applied a presumption used by courts in the district that a fixed weekly wage covers only the first 40 hours of work. The court noted that this presumption has not been addressed by the Second Circuit and can be rebutted. Gina Group argued that Jung needed to plead more facts showing that her wages did not include overtime pay, but the court rejected that argument at the pleading stage. The court noted that later discovery might show that Jung was exempt from overtime requirements or that the parties agreed her salary included overtime, but those possibilities did not defeat her claims on a motion to dismiss.

Wage-Notice Claim

The court held that Jung adequately stated a claim under NYLL section 195(1). She alleged that Gina Group never gave her the required written notice at hiring, in either English or Korean, identifying her rate and basis of pay, regular payday, and other required information. The court found those allegations sufficient to proceed.

Collective and Class Claims

The court denied the motion to dismiss Jung’s FLSA collective-action claim. An FLSA collective action allows an employee to sue for herself and other employees who are similarly situated. Jung alleged that Gina Group treated all of its other non-exempt salaried employees similarly under a company policy or practice of minimizing labor costs by failing to pay overtime. The court found those allegations sufficient to create a plausible inference that similarly situated workers existed.

The court also denied the motion to dismiss Jung’s proposed NYLL class claims for overtime and wage-notice violations. Class claims generally should not be terminated before discovery unless it is facially implausible that the plaintiff could later satisfy the requirements for a class action. The court found that standard was not met here.

Discrimination Claims

The court granted the motion to dismiss Jung’s NYSHRL and NYCHRL discrimination claims. To state those claims, Jung had to allege facts supporting an inference that the adverse employment action occurred because of her protected characteristic. The court found that she had not alleged enough facts showing that the non-Korean designers were similarly situated to her in all material respects.

Regarding the vacation request, Jung did not allege that the non-Korean designers had completed the same amount of their work or were otherwise comparable to her. She also did not allege sufficient facts showing that the non-Korean designers who remained employed were similarly situated to her. The court therefore dismissed the discrimination and wrongful-termination claims at the motion-to-dismiss stage.

Disposition

Judge Mary Kay Vyskocil denied in part and granted in part Gina Group’s motion to dismiss the Second Amended Complaint. The motion was denied as to Jung’s individual and collective FLSA overtime claims, individual and class NYLL overtime claims, and individual and class NYLL wage-notice claims. The motion was granted as to Jung’s NYSHRL and NYCHRL claims for disparate treatment and wrongful termination based on race and national origin.