Cho v. Osaka Zen Spa

Background

So Young Cho alleged that she worked for Osaka Zen Spa from October 2013 until June 25, 2018. She asserted claims under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL) for unpaid wages and benefits. She also alleged disability- and religion-based discrimination and retaliation under New York State and New York City human-rights laws.

Cho sued Osaka, Joshia Lee, Joseph Lee, and other defendants. Joshia Lee and Joseph Lee, called the “Moving Defendants,” sought judgment on the pleadings under Federal Rule of Civil Procedure 12(c). That rule allows a party to seek dismissal after the pleadings are closed when the allegations, even assumed to be true, do not show a legal basis for relief.

Reasoning

The court refused to consider declarations submitted by Cho and the Moving Defendants because those materials were outside the pleadings. The court also declined to convert the Rule 12(c) motion into a motion for summary judgment, noting that the motion was made early enough that additional facts could still be discovered.

For liability under the FLSA and NYLL, a defendant must be an “employer.” The court applied the economic-reality analysis, which considers such matters as the power to hire and fire, control over schedules or working conditions, control over pay, and maintenance of employment records. The court explained that these factors are not rigid or exclusive, but allegations must contain enough factual detail to make employer status plausible.

The court found that Cho’s allegations that Joshia Lee and Joseph Lee could hire and fire workers, set salaries, maintain records, and control Osaka’s operations merely repeated the legal factors without concrete facts. The allegations that the defendants insulted her because of her disabilities, that Joshia Lee assaulted her, and that he threw a bottle when she objected to conduct involving female customers did not show that either defendant had formal or functional control over her employment. The allegation that Joseph Lee made her clean the sixth floor for him and his partner at Amway also did not explain how that work related to her employment at Osaka. The court therefore concluded that Cho had not pleaded sufficient facts to show that the Moving Defendants were her employers under the FLSA or NYLL.

Supplemental Jurisdiction

The court concluded that it had supplemental jurisdiction—authority to hear related state-law claims—because Cho alleged that the wage and discrimination claims involved overlapping facts. But after dismissing the FLSA claims, the only claims providing original federal jurisdiction over the Moving Defendants, the court declined to exercise supplemental jurisdiction over the remaining state-law claims. The court stated that Cho could reallege those claims if she chose to replead.

Disposition

Judge Ramos granted the motion for judgment on the pleadings as to the claims against Joshia Lee and Joseph Lee. Cho’s claims against those defendants were dismissed without prejudice, and she was granted leave to file an amended complaint by May 24, 2021.