Nuno Carrera v. DT Hospitality Group Inc.

Background

Patricio Nuno Carrera and Geraldo Marquez sued DT Hospitality Group, doing business as Co Ba Restaurant, and Kien Truong under the Fair Labor Standards Act (FLSA) and New York Labor Law. The plaintiffs alleged that they worked at the restaurant in Manhattan. Nuno worked as a dishwasher from approximately November 2012 through March 2019, and Marquez worked as a food preparer from approximately January 2011 through March 2019. Both also made deliveries when needed.

The plaintiffs alleged that they worked seven days per week and 67.5 hours per week until 2015, and then six days per week and 57 to 58 hours per week through March 2019. They were paid a fixed daily wage of $70 until the end of 2017 and $80 afterward, regardless of the hours worked. They alleged that DT Hospitality failed to pay the required minimum wage and overtime, failed to pay spread-of-hours compensation for workdays longer than ten hours, paid them every two weeks instead of weekly, failed to provide wage statements, and failed to keep records of their wages and hours.

Default and Procedural History

The plaintiffs filed the action on May 9, 2019, and filed the operative amended complaint on May 30, 2019. Truong filed an answer that purported to represent both himself and DT Hospitality without a lawyer. The court reminded the defendants that a corporation cannot defend itself in court without an attorney. Despite extensions and additional reminders, DT Hospitality did not obtain counsel. The Clerk entered a certificate of default against DT Hospitality, and the plaintiffs moved for default judgment.

A default judgment is a judgment entered when a defendant fails to plead or otherwise defend. For this motion, the court treated the complaint's well-supported factual allegations as true but still required the plaintiffs to show a legal basis for liability. The court found that DT Hospitality had been properly served with the summons, amended complaint, motion, supporting papers, and the court's order concerning the motion.

The case against Truong was stayed after the plaintiffs reported that he had filed for Chapter Seven bankruptcy. The court did not extend that stay to DT Hospitality because the record did not show that a claim against the company would immediately harm Truong's bankruptcy estate.

Liability Rulings

The court found the FLSA claims timely for alleged violations occurring on or after May 9, 2016, based on its finding that the alleged FLSA violations were willful. The New York Labor Law claims were timely for alleged violations occurring on or after May 9, 2013.

The court found that the allegations sufficiently showed that DT Hospitality was covered by the FLSA, that Nuno and Marquez were employees, and that their jobs were not exempt from the statute. The allegations that they worked between 57 and 67.5 hours per week and received no additional pay for hours over 40 were sufficient to establish liability for unpaid overtime under both the FLSA and New York Labor Law.

For minimum wages, the plaintiffs sought liability under New York Labor Law only. The court found that the allegations established minimum-wage violations from December 31, 2018, through the end of the plaintiffs' employment in March 2019. The court did not extend that finding to the earlier period because the complaint and declarations did not say that DT Hospitality employed eleven or more people, which affected the applicable New York City minimum-wage rate.

The court also found liability for failing to pay spread-of-hours compensation under New York Labor Law. That compensation is one additional hour of pay at the basic minimum-wage rate for a workday whose beginning-to-end span exceeds ten hours. The court found further liability for failing to provide Nuno with the required hiring notice, failing to provide both plaintiffs with wage statements, and paying the plaintiffs every two weeks instead of weekly even though their work was principally manual.

Disposition

Judge Ronnie Abrams granted the plaintiffs' motion for default judgment against DT Hospitality. The action remained stayed as to Truong. The court referred the matter to Magistrate Judge Parker for an inquiry into damages and attorney fees. The opinion did not set the amount of damages or attorney fees.