Hong v. JP White Plains, Inc.

Background

Yingcai Hong sued four corporate defendants and four individual defendants under the Fair Labor Standards Act (FLSA) and New York Labor Law. He alleged that the defendants employed him as a deliveryman at Haiku Asian Bistro in White Plains during periods from about November 2015 to August 2016 and from February 2017 to May 20, 2018.

Hong alleged that he generally worked more than 40 hours per week but was not paid the required overtime rate. He also alleged that deductions for cash tips, meals, and transportation reduced his effective pay below the federal and New York minimum wages. He claimed that he was not reimbursed for gasoline or vehicle maintenance, was paid $5 for 40 to 60 minutes of non-tipped van-driving work, and did not receive required wage notices, wage statements, or notice of tip deductions.

The amended complaint asserted 13 causes of action involving meal and transportation credits, tip retention, minimum wages, overtime, meal periods, recordkeeping, hiring notices, wage statements, and mileage reimbursement. Hong abandoned the claims concerning meal periods and recordkeeping under counts IX and X, so the court did not address them.

Rule 12(b)(1) Standing Ruling

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), arguing that Hong lacked standing because he had not sufficiently alleged that they were his employers. The court denied that motion. It held that Hong had alleged an injury—failure to receive legally required wages—that was connected to the defendants’ conduct and could be remedied by a favorable judgment.

The court explained that whether a defendant was Hong’s employer under the FLSA and New York law concerned the merits of the claims, not subject-matter jurisdiction. The court therefore considered that issue under Rule 12(b)(6), which tests whether a complaint states a legally sufficient and plausible claim.

Rule 12(b)(6) Employer Analysis

The court held that Hong plausibly alleged that Soonwah Lee was his employer. Hong alleged that he knew Lee as “Boss,” and that Lee authorized a delivery head to hire him, a telephone attendant to pay him, and a manager to fire him. Those allegations sufficiently connected Lee to control over Hong’s employment under both the FLSA and New York Labor Law.

The court dismissed the claims against Pietro Diana, Hsingya Chang, and Jie Zhang. Hong alleged that they were shareholders or owners of the Haiku Asian Bistro enterprise, but the complaint did not include concrete facts tying them to Hong’s employment. Ownership or corporate decision-making unrelated to an employee’s work was not enough to establish employer status.

The court allowed the claims against HAIKU @ WP INC. and JP WHITE PLAINS, INC. to proceed because Hong alleged that both did business as Haiku Asian Bistro White Plains, where he worked.

The court dismissed the claims against JP BRONXVILLE INC. and JP SCARSDALE INC. Hong alleged that those companies operated Haiku locations in Bronxville and Scarsdale, and that the locations shared a brand and website. But he did not allege that he worked for, reported to, delivered for, communicated with, or was controlled by either location. The court concluded that the complaint did not establish a sufficient connection between those companies and Hong’s employment.

Wage-and-Hour Claims

The court allowed Hong’s wage-and-hour allegations to proceed. It found plausible his allegations that he worked an average of 58.5 hours per week while being paid $7.50 per hour until December 2017, and an average of 50.5 hours per week while being paid $9.15 per hour from January through May 2018. Hong also alleged weekly deductions of $10 for cash tips, $20 to $25 for meals, and $24 for transportation.

Although the defendants argued that Hong’s stated hourly rates exceeded the federal minimum wage, the court noted that the alleged deductions and unpaid overtime could have reduced his effective wage below the required federal and New York minimums. The court therefore found that Hong plausibly alleged minimum-wage, overtime, deduction, and related wage claims under the FLSA and New York Labor Law.

Recordkeeping and Notice Claims

The court also found plausible Hong’s allegations that he did not receive required hiring notices, wage statements, or written notice concerning the FLSA tip-credit rules. Those allegations were sufficient at the motion-to-dismiss stage to support recordkeeping and notice claims under the FLSA and New York Labor Law.

Disposition

The court granted in part and denied in part the defendants’ motion to dismiss. It dismissed with prejudice the claims against JP Bronxville, JP Scarsdale, Pietro Diana, Hsingya Chang, and Jie Zhang. Claims against Soonwah Lee, JP White Plains, Inc., and HAIKU @ WP INC. for wage-and-hour and recordkeeping violations under the FLSA and New York Labor Law remained. The court directed those defendants to answer by May 5, 2021, and directed the parties to file a completed case-management plan and scheduling order by May 19, 2021.