Mahuiztl-Atilano v. Pio Restaurant, LLC

Background

Six former employees sued Pio Restaurant, LLC, which did business as Luna Piena, and its owner, Besim Kukaj. They alleged violations of the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL), including failure to pay the minimum wage and overtime compensation. The employees worked as food runners, cooks, food preparers, kitchen helpers, dishwashers, busboys, and delivery workers. The opinion gives one example in which Margarito Martinez-Ortega allegedly was paid $700 per week for all hours worked despite working 72 hours per week.

The defendants initially appeared and filed an answer denying the allegations. Their lawyer later withdrew after reporting that the defendants had stopped communicating with and paying counsel. The court gave the defendants 60 days to retain new counsel and warned that the corporation had to be represented by a lawyer. Neither defendant retained new counsel or otherwise appeared. Kukaj also did not tell the court that he wanted to proceed without a lawyer. The court struck the defendants’ answer, the Clerk entered a certificate of default, and the plaintiffs moved for default judgment and attorney’s fees.

Liability

The court explained that a default admits well-pleaded factual allegations about liability, but not legal conclusions or the amount of damages. The court must still determine whether the allegations state a valid claim and whether the requested damages are supported with reasonable certainty.

The court found that the allegations established the employment relationship required by the FLSA. The plaintiffs’ job duties and lack of independent judgment supported the conclusion that they depended on the defendants’ business for work rather than operating businesses of their own. The allegations also supported treating Pio Restaurant and Kukaj as joint employers because they shared control over the plaintiffs, working conditions, and compensation practices.

The court further found sufficient allegations that the restaurant engaged in interstate commerce, including through the use of goods from outside New York, and that its annual sales were at least $500,000. The allegations also adequately described work hours, pay, and unpaid minimum-wage and overtime amounts. The court therefore found liability under both the FLSA and NYLL. It also found sufficient allegations for New York “spread-of-hours” compensation for days exceeding ten hours of work.

Damages, Fees, and Costs

The plaintiffs submitted detailed charts showing each plaintiff’s hours, pay, and claimed shortfall. The court found this evidence sufficient to determine damages without an inquest hearing. In the conclusion, the court directed entry of judgment for $354,856.50 in unpaid minimum wages, overtime compensation, and spread-of-hours premiums; $354,856.50 in liquidated damages; $60,000 in statutory damages; and $13,215.23 in attorney’s fees and costs.

The court approved the requested attorney’s hourly rate of $400, the paralegal rate of $100, and compensation for 37.1 hours of work. It also approved $595.23 in costs, primarily for filing and service of process. The court granted the plaintiffs’ motion for default judgment, directed the Clerk to enter judgment for a stated total of $782,928.23, directed the Clerk to close the case, and directed the plaintiffs to mail the opinion to the defendants and the New York Secretary of State.