Mestizo v. H2 Candy & Nuts, Inc.

Background

Sonia Garcia Mestizo and Maura Amastal sued their former employer, H2 Candy & Nuts, Inc., doing business as Sweet Rainbow, and Hisham Al-Assaf and Haytham Khalil, individually and as officers of H2 Candy & Nuts. The plaintiffs alleged violations of Title VII of the Civil Rights Act of 1964, the New York State Human Rights Law, the retaliation and recordkeeping provisions of the Fair Labor Standards Act, and the New York Labor Law’s retaliation and wage-statement provisions.

The plaintiffs worked as candy packers and were born in Mexico. On their last day of work—identified in the record as September 1, September 2, or September 4, 2016—they were paid a flat daily cash salary of $65. The plaintiffs and other candy packers negotiated with the defendants for an increase to $75 or $80 per day. Defendant Khalil offered $70 per day. The plaintiffs said that, after they asserted that they had rights as workers, Defendant Al-Assaf told them to leave and made comments referring to their Mexican origin. The defendants disputed the plaintiffs’ account and said the plaintiffs chose to leave after the wage negotiations failed.

The conversation was recorded. The court stated that the recording confirmed parts of the testimony but was sometimes difficult to understand because of substantial language barriers. The New York State Department of Labor later determined that H2 Candy & Nuts owed back wages to five current and four former employees, including the plaintiffs, and had failed to keep proper business records.

Summary-judgment standard

Summary judgment is a procedure that allows a court to decide a claim without a trial when there is no genuine dispute over a fact that could affect the result. The court must view the evidence favorably to the party opposing the motion. Here, both the plaintiffs and defendants moved for summary judgment under Federal Rule of Civil Procedure 56.

Title VII and New York discrimination claims

The defendants argued that Title VII did not apply because H2 Candy & Nuts had fewer than 15 employees. The court found that the plaintiffs had not produced evidence establishing that the company had at least 15 employees during the relevant period. But the defendants also had not established the opposite. Their testimony concerned the number of employees at the time of their depositions, and the labor-department documents did not establish the company’s employee count during the relevant period. The court therefore found a genuine factual dispute about whether Title VII applied.

The court also found that the plaintiffs had enough evidence at the initial stage of the discrimination analysis to show that they were members of a protected group, were qualified for their jobs, and may have suffered an adverse employment action under circumstances suggesting discrimination. The court treated the evidence that the defendants told the plaintiffs to go, together with the recording and testimony, as sufficient to meet this initial burden. The defendants’ evidence could persuade a jury that the plaintiffs quit, but it did not resolve the issue on summary judgment.

The court further found factual disputes about the defendants’ stated reason for ending the plaintiffs’ employment and whether the plaintiffs’ Mexican origin played a role. The court noted evidence supporting the defendants’ position that the dispute was about the requested raise, including that other Mexican candy packers later returned to work. But it also found that the statements referring to the plaintiffs’ Mexican origin while they were being told to leave could support an inference that national origin or race played a role. The court left that factual question for a jury.

Because the court held that the parties’ New York State Human Rights Law claims are analyzed the same way as the Title VII claims, it applied the same analysis and denied summary judgment on those claims as well.

Retaliation claims

The plaintiffs argued that Mestizo’s statement about the workers having rights was a complaint about their right to proper wages. The court found that, in the context of the wage negotiations, the statement was sufficiently clear to notify the defendants that the plaintiffs were asserting wage rights, even though Mestizo did not specifically mention the Fair Labor Standards Act.

The court found that the plaintiffs met the initial requirements for retaliation: they asserted protected wage rights, suffered an employment action that disadvantaged them, and were told to leave shortly afterward. The defendants’ inability to provide a higher raise was a legitimate, non-discriminatory reason for the action, but the court found a factual dispute about whether the plaintiffs’ assertion of wage rights was the real reason. It therefore left the retaliation claims for a jury and denied both sides’ motions for summary judgment on those claims.

Wage-record claims

The plaintiffs alleged that the defendants failed to provide written information required by the New York Wage Theft Prevention Act, including pay rates and employer information. The defendants argued that the pleadings were insufficient and that they had an affirmative defense based on timely payment and a good-faith belief that the notices were not required.

The court found that the amended pleadings adequately alleged that the plaintiffs were paid in cash and never received paychecks, pay stubs, wage statements, or other documents showing their earnings. But the court found factual disputes about whether the required documents were provided and whether the defendants could establish their asserted defense. It denied both sides’ motions for summary judgment on these claims. The opinion also noted that, although the plaintiffs referred to Fair Labor Standards Act recordkeeping claims, they did not develop those claims and appeared to rely on New York law for the recordkeeping allegations.

Disposition

The court denied the plaintiffs’ motion for summary judgment and denied the defendants’ cross-motion for summary judgment. The opinion scheduled a pretrial conference for March 3, 2021, and directed the clerk to terminate the plaintiffs’ motion at docket entry 57.