Alvarado Balderramo v. Go New York Tours Inc.

Background

Victor H. Alvarado Balderramo brought a Fair Labor Standards Act (FLSA) collective action and a New York Labor Law (NYLL) class action against Go New York Tours Inc. and Asen Kostadinov. The opinion describes Kostadinov as the company’s president and owner. The plaintiffs alleged that the defendants failed to pay required minimum wages and overtime, provide spread-of-hours pay, provide uniform-maintenance pay, pay wages on time, and provide required wage statements and wage notices.

Alvarado alleged that he worked between 70 and 87 hours per week and often worked more than 10 hours per day. The court had conditionally certified an FLSA collective action covering employees who worked as tour bus drivers during the specified period, and later certified a Rule 23 class involving bus drivers. The court denied conditional certification for a class covering tour guides. The parties had been engaged in discovery.

The New York State Department of Labor investigations

The New York State Department of Labor (NYSDOL) had conducted three investigations into the defendants’ labor practices, with two eventually consolidated. One investigation resulted in a settlement under which the defendants paid $18,066.89 to nine employees. Three bus drivers involved in that investigation were also part of this case. The settlement addressed certain wage, overtime, meal-break, and wage-statement issues, but the opinion states that it did not appear to address the plaintiffs’ spread-of-hours or uniform-maintenance claims and did not cover all people or time periods involved in this case.

The two other investigations concerned alleged minimum-wage and overtime violations, unlawful deductions, meal breaks, recordkeeping, and wage statements. The NYSDOL issued a 2016 notice seeking more than $6 million in unpaid wages and other damages for an audit period running from March 2012 to March 2015. After revisions, the NYSDOL sought a total of $5,867,259.98. The defendants said they were waiting for the NYSDOL to issue an Order to Comply, but the record showed no further activity in those investigations after August 2019.

The parties disputed how much the investigations overlapped with this case. The plaintiffs identified claims involving spread-of-hours pay, uniform-maintenance pay, timely payment of wages, wage notices, unpaid hours, and periods outside the NYSDOL’s audit period. They also argued that many class members were not included in the NYSDOL’s calculations. The defendants argued that the investigations were broad enough to cover the claims, even when the NYSDOL had not included particular people or claims in its calculations.

Defendants’ motion

The defendants moved for summary judgment under Federal Rule of Civil Procedure 56, arguing that the case should be dismissed because of the NYSDOL investigations. In the alternative, they asked the court to stay, or pause, the case under the primary-jurisdiction doctrine. That doctrine allows a court with authority over a case to defer when resolving an issue requires an administrative agency’s special expertise or discretion.

The court applied a four-factor test considering whether the issues were within judges’ ordinary experience, whether the NYSDOL had particular discretion over them, whether continuing the case risked inconsistent decisions, and whether the agency had previously been asked to address the issues. The court also weighed the benefits of agency involvement against the delay and other costs of pausing or dismissing the case.

Court’s analysis

The court found that the first factor strongly favored the plaintiffs. The case required applying established wage-and-hour laws to the defendants’ labor practices, which the court described as an ordinary type of dispute for courts to decide. The defendants did not identify technical or policy issues that made the case uniquely suited to the NYSDOL.

The second factor also weighed against applying the doctrine. Although the NYSDOL could investigate NYLL violations, New York law allows employees to pursue private lawsuits without first obtaining an agency investigation. The plaintiffs also asserted FLSA claims, over which the NYSDOL did not have jurisdiction. The court concluded that the statutory scheme treated agency investigations and private lawsuits as parallel enforcement methods rather than giving the NYSDOL exclusive authority.

The court recognized some risk of inconsistent decisions but found that risk speculative and limited to only some claims and class members. The defendants had not shown that the NYSDOL investigated all of the claims, people, or time periods at issue. The court also explained that an NYSDOL investigation, without an Order to Comply and later adversarial proceedings, would not ordinarily have a preclusive effect that legally barred the court from deciding claims.

The court further found that dismissing or staying only part of the case would be difficult and could still prejudice the plaintiffs. Questions remained about whether alleged violations continued after the NYSDOL’s audit period and whether workers had additional claims for unpaid hours, uniform-maintenance pay, or spread-of-hours pay. The agency’s apparent lack of activity since August 2019 also raised concerns about prolonged delay. Although the fact that applications had been made to the NYSDOL favored applying the doctrine, the court gave that factor reduced weight because the defendants had not shown that the investigations would sufficiently help resolve this case.

Disposition

Considering all four factors, the court held that retaining jurisdiction over the case was preferable to dismissing or delaying it. The court stated that the benefits of keeping the case in court outweighed the potential costs, and that dismissal or a stay could leave much of the class without an opportunity to pursue claims not clearly covered by the NYSDOL investigations.

The court denied the defendants’ motion for summary judgment. The opinion does not state that the plaintiffs had already proved their wage claims; it ruled instead that the pending NYSDOL investigations did not justify ending or pausing the federal case. The clerk was directed to terminate the motion, and the court scheduled a later case-management conference.