Brito v. Lucky Seven Restaurant & Bar LLC

Background

Jesus Brito sued Lucky Seven Restaurant & Bar, LLC, doing business as Lucky 7 Tapas Bar; La Casa Del Mofongo, Inc.; Felix Cabrera; Avi Dishi; and other defendants. He alleged violations of the Fair Labor Standards Act (FLSA), the New York Labor Law (NYLL), and the Wage Theft Prevention Act (WTPA). His claims concerned unpaid overtime, unpaid NYLL spread-of-hours premiums for days exceeding 10 hours, and wage statements that did not accurately report his regular and overtime hours.

Brito worked for both Lucky Seven and Mofongo. He received a fixed weekly payment for his work at both restaurants, although the parties disputed whether the payment was a salary or hourly compensation and whether it included overtime. The court found that the evidence established, as a matter of law, that Brito was paid a weekly salary. The parties also disputed how many hours Brito worked and whether he received spread-of-hours pay. The wage statements reported fixed numbers of regular hours and no overtime hours, which the court found did not reflect his actual work.

The court reviewed Magistrate Judge Katharine H. Parker’s report and recommendation concerning the parties’ cross-motions for summary judgment. Summary judgment is a decision without a trial when the evidence shows no genuine dispute about a material fact and one side is entitled to judgment under the law.

Employer Status

The court held that Lucky Seven and Mofongo were Brito’s joint employers under both the FLSA and the NYLL. It also granted Brito summary judgment establishing that Dishi was his employer under both statutes. The court relied on evidence that Dishi had operational control, participated in hiring managers, required approval for wages above minimum wage at Lucky Seven, made major business decisions for Mofongo, had authority to sign checks, and played a role in Brito’s termination.

The court denied Brito’s motion concerning Cabrera’s individual employer status. Conflicting evidence existed about whether Cabrera owned part of Lucky Seven and how much he participated in managing either restaurant. Those factual disputes meant that a jury could determine whether Cabrera was an employer.

Overtime Liability

The court granted Brito’s partial motion for summary judgment on liability for his unpaid overtime claims under the FLSA and NYLL and denied defendants’ competing motion. The court held that Brito was paid a weekly salary, not hourly wages. It also held that defendants had not produced sufficient evidence that Brito and the restaurants agreed that the salary included overtime.

The court rejected defendants’ reliance on timesheets stating that payments included overtime. It allowed the timesheets to be considered for the limited purpose of showing that Brito signed them in connection with receiving pay. But it did not treat the timesheets as reliable evidence of Brito’s actual hours or of the statement that his payments included overtime. Brito disputed the accuracy of the recorded hours, and defendants had not offered a qualified records custodian to establish their accuracy.

The court held Dishi, Lucky Seven, and Mofongo jointly and severally liable for unpaid overtime to the extent they failed to pay the required wages. The amount of overtime damages was left for a damages trial.

Spread-of-Hours Claim

The court denied both Brito’s and defendants’ motions for summary judgment on Brito’s NYLL spread-of-hours claim. The claim depended on disputed facts about how often Brito worked more than 10 hours in a day and whether his weekly compensation included the required spread-of-hours premiums. Because those disputes could affect the outcome, the claim remained unresolved.

Wage Statements and WTPA Damages

The court granted Brito’s partial motion for summary judgment on liability for statutory damages under the WTPA and denied defendants’ motion. The court held that the wage statements violated NYLL § 195(3) because they inaccurately reported Brito’s regular and overtime hours. Providing a wage statement was not enough; the statement also had to contain accurate required information.

The court held Dishi, Lucky Seven, and Mofongo jointly and severally liable for WTPA statutory damages, with the amount to be determined after a damages trial.

Liquidated Damages, Prejudgment Interest, and Attorney’s Fees

The court denied both sides’ motions for summary judgment on liquidated damages for the spread-of-hours claim. Because liability on that claim remained disputed, the court found it premature to decide whether defendants lacked a good-faith basis for their conduct. Brito’s request for liquidated damages on that claim remained open.

The court granted Brito’s partial motion and denied defendants’ motion concerning NYLL prejudgment interest on the unpaid overtime claims. It held Dishi, Lucky Seven, and Mofongo jointly and severally liable for that interest, subject to the limitation that prejudgment interest could not duplicate any federal liquidated damages awarded for the same wages.

The court denied both sides’ motions for summary judgment on NYLL prejudgment interest for the spread-of-hours claim because liability on that claim had not been decided.

The court granted Brito’s partial motion and denied defendants’ motion for liability for reasonable attorney’s fees and costs. It held Dishi, Lucky Seven, and Mofongo jointly and severally liable for those fees and costs, with the amount to be determined after a damages trial.

Disposition

Judge Paul A. Engelmayer adopted the report and recommendation in principal part. The court granted Brito’s motions establishing Dishi’s employer status, the joint-employer status of Lucky Seven and Mofongo, unpaid-overtime liability, WTPA statutory-damages liability, prejudgment-interest liability for unpaid overtime, and attorney’s-fee liability. It denied Brito’s motion concerning Cabrera’s employer status, denied both sides’ motions on spread-of-hours liability, and denied both sides’ motions on liquidated damages and prejudgment interest relating to the spread-of-hours claim.