Diaz v. Bronx Pawnbroker Inc.

Background

Brandon Diaz brought claims under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). He alleged that Bronx Pawnbroker Inc. and Concourse Pawnbrokers, Inc. paid him less than the required minimum wage and did not pay required overtime or spread-of-hours premiums. He also asserted claims concerning wage notices, wage statements, and retaliation. Diaz worked at both pawn shops during periods from March 2015 through August 6, 2018. The opinion states that he worked day shifts of about 54 hours per six-day week and night shifts of about 90 hours per six-day week.

Michelle Wu owned both pawn shops. Fang Hung Wu owned Concourse NY Realty Inc., which the opinion describes as a real-estate business. Diaz’s counsel sent a July 13, 2018 letter stating that Diaz had retained counsel and was investigating possible wage-and-hour violations. Michelle Wu fired Diaz on August 6, 2018, accusing him of masturbating at work. Diaz filed this action on August 20, 2018.

Rulings on the Claims

Diaz withdrew all claims against Concourse NY Realty Inc. and his retaliation claims against all defendants. The court dismissed those claims without prejudice under Federal Rule of Civil Procedure 41(a)(2).

The defendants sought summary judgment, which would end a claim when no genuine dispute of important fact requires a trial. They argued, among other things, that the pawn shops did not meet the FLSA’s enterprise-coverage requirement. That requirement generally applies when a business has employees handling goods involved in interstate commerce and at least $500,000 in annual gross sales.

The defendants relied on tax documents and Michelle Wu’s statement that the combined annual sales of the pawn shops were below $500,000. Diaz and another employee submitted sworn estimates based on their work at the registers, stating that the shops generated substantially more revenue. The court held that this evidence created a genuine dispute of material fact and denied summary judgment on the FLSA coverage issue. The court did not decide whether Diaz also met the separate individual-coverage test.

The defendants also sought summary judgment on whether Michelle Wu was an employer under the FLSA and NYLL. The court found evidence concerning all four relevant factors: Wu’s authority to hire and fire, her supervision and control of schedules or employment conditions, her role in setting pay and payroll methods, and her maintenance of employment records. The court denied the defendants’ request for summary judgment on this issue because the record, viewed at that stage, contained enough evidence for a fact-finder to determine that she was an employer.

The court then granted partial summary judgment for Diaz on its own initiative. It ruled that, as a matter of law, Michelle Wu was Diaz’s employer under both the FLSA and NYLL. The court relied on undisputed evidence that Wu had hiring and firing authority, supervised employees and approved schedules, handled payroll and pay rates, decided that employees would be paid in cash, and kept records of hours and pay. The court concluded that the defendants had a full and fair opportunity to address the issue because they had moved for summary judgment on it.

Motion to Compel

Diaz asked the court to compel Bronx Pawnbroker and Concourse Pawnbrokers to produce computer records of pawn transactions from 2015 through 2018. The defendants represented that they had searched the computer system identified by Michelle Wu and produced all responsive documents. Diaz argued that the production included handwritten records rather than the computer records he sought, but the court found that he offered only conclusory allegations that responsive documents had been withheld. The court denied the motion to compel.

Disposition

The court dismissed without prejudice Diaz’s claims against Concourse NY Realty Inc. and his retaliation claims against all defendants. It denied the defendants’ summary judgment motion and denied Diaz’s motion to compel. It granted partial summary judgment for Diaz on the issue that Michelle Wu was his employer under the FLSA and NYLL. The court also denied Diaz’s request for oral argument on the motion to compel as moot.