Nunez v. Broadway Beauty Wholesale Inc.

Background

Sucre Nunez sued Broadway Beauty Wholesale Inc. and its owner, Musthafa Kamal, alleging violations of the Fair Labor Standards Act, the New York Labor Law, and New York’s Wage Theft Prevention Act. Nunez worked as an in-store sales clerk who also stacked products and received deliveries. The opinion states that he worked continuously from August 2003 through August 25, 2018.

The court deemed Nunez’s supported factual statements admitted for purposes of the motion because Defendants’ response did not comply substantially with the local rule requiring paragraph-by-paragraph responses supported by evidence. The court nevertheless stated that it ensured Nunez’s assertions were supported by the record.

Nunez was paid partly in cash and partly by check. His paystubs did not show the cash payments or the hours worked. He was paid a fixed amount regardless of the number of hours worked. The opinion states that he generally worked 57 hours per week, although Nunez accepted, for this motion only, Defendants’ position that he worked 37 hours per week during 2017.

Court’s Analysis

Summary judgment is appropriate when there is no genuine dispute about a material fact and the moving party is entitled to judgment under the law. The court considered five issues: minimum wage, overtime, liquidated damages, prejudgment interest, and wage-and-hour notices and statements.

Minimum wage. From January through mid-April 2017, Defendants paid Nunez $600 every two weeks, or $300 per week. Using the accepted figure of 37 hours per week, that amounted to $8.11 per hour, below New York’s $10.50 minimum wage. In 2018, Defendants paid $1,340 every two weeks, or $670 per week. Based on 57 hours per week, that amounted to $11.75 per hour, below the applicable $12.00 minimum wage. The court rejected Defendants’ argument that yearly pay should be used to establish compliance because New York law requires minimum wage to be evaluated each workweek. The court granted summary judgment on liability for Nunez’s 2017 and 2018 New York minimum-wage claims.

Overtime. Employees who work more than 40 hours per week must receive at least one and one-half times their regular rate for the extra hours. The court concluded that Nunez was paid less than required under New York law in 2014, 2015, 2016, and 2018, based on the applicable minimum wages and 57-hour workweeks. It also concluded that Defendants violated the Fair Labor Standards Act’s overtime requirement in 2018. The court therefore granted summary judgment on liability for those New York and federal overtime claims. For purposes of the federal claim, the court applied the ordinary two-year limitations period and did not resolve whether any violation was willful.

Liquidated damages. Liquidated damages are additional damages generally equal to unpaid wages. An employer may avoid them by showing that it acted in good faith and had reasonable grounds to believe it complied with wage law. Defendants offered no evidence that they took active steps to learn and follow the federal or state requirements. The court granted summary judgment on Nunez’s entitlement to liquidated damages under the Fair Labor Standards Act or New York law, while noting that duplicative liquidated damages for the same conduct are not allowed. The amount would be determined later.

Prejudgment interest. The court held that Nunez was entitled to prejudgment interest under New York law. The precise amount depended on when the claims arose and would be calculated in a later proceeding.

Wage-and-hour notices. New York law requires certain written pay notices at the beginning of employment. The court held that the enforcement provision for this requirement does not apply retroactively to employees who began work before April 9, 2011. Because Nunez stated that he began working for Defendants in August 2003, the court denied summary judgment on this claim.

Wage statements. New York law also requires wage statements to include information such as pay rates, regular hours, and overtime hours. The court found that Nunez’s 2018 paystubs lacked the required regular hourly rate, overtime rate, regular hours, and overtime hours. Because Defendants had not fully paid the wages due, they could not use the statutory defense available to employers that made complete and timely payment. The court granted summary judgment on liability for the wage-statement claim.

Disposition

Judge J. Paul Oetken granted in part and denied in part Nunez’s motion for partial summary judgment. The court granted summary judgment on liability for the 2017 and 2018 New York minimum-wage claims; the 2018 federal overtime claim; the 2014, 2015, 2016, and 2018 New York overtime claims; the federal or New York liquidated-damages claim; the New York prejudgment-interest claim; and the New York wage-statement claim. The court denied summary judgment on liability for the New York wage-and-hour notice claim. Damages were left for a later proceeding, and the parties were directed to submit a joint letter about next steps within 21 days.