Rahman v. Red Chili Indian Cafe, Inc.

Background

Mahfujur Rahman and Liton Shah brought claims under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL) for unpaid wages and related violations. The defendants were Red Chili Indian Cafe, Inc., Mohammed Mojnu Miah, also known as Sheikh Mohammed Mojnu, and Noor Islam, also known as Mohammed Harun Miah.

The court had previously granted a default judgment against Red Chili, which never appeared through counsel. The individual defendants appeared and filed an answer, but the court struck that answer twice because of their dilatory conduct, disregard of court orders, and failure to participate in the litigation. The individual defendants therefore went into default. Although they were given an opportunity to respond to the renewed motion for default judgment, they did not file a response.

Service and Default-Judgment Standard

The court concluded that the individual defendants had been properly served. They were personally served with the summons and complaint in July 2017, later appeared and answered, and were served by email and mail with the renewed motion and related court orders.

Under Federal Rule of Civil Procedure 55, a court may enter default judgment against a defendant who fails to plead or otherwise defend. A default admits well-pleaded factual allegations, but it does not admit legal conclusions. The court therefore considered whether the complaint’s factual allegations established a legal basis for liability.

Claims Against the Individual Defendants

The court held that the allegations established the individual defendants’ liability for the FLSA minimum-wage and overtime claims. The complaint alleged that Red Chili engaged in interstate commerce, had annual gross sales of at least $500,000, employed the plaintiffs, and was not exempt from the FLSA. The plaintiffs also described the hours they worked, including overtime hours, and the compensation they received.

The court also found sufficient allegations that each individual defendant qualified as an employer under the FLSA. The complaint alleged that they were owners and/or shareholders of Red Chili and had the power to hire and fire employees, control employment terms and work schedules, set wages, and maintain employment records.

The court found the corresponding NYLL minimum-wage and overtime claims adequately established for the same reasons. It also found sufficient allegations for NYLL claims that the defendants failed to pay spread-of-hours compensation, failed to provide pay stubs and required hiring notices, and failed to reimburse or improperly deducted expenses relating to bicycles that the plaintiffs were required to purchase, repair, and maintain for delivery work.

Retaliation Claim

Rahman separately asserted retaliation under NYLL section 215. That provision prohibits an employer from discharging or otherwise discriminating against an employee because the employee complained about a legal violation. The court found that Rahman’s claim was not established because the complaint indicated that he made his complaint after he had left his employment at Red Chili in July 2016. The court therefore did not grant default judgment on Count Eight.

Disposition

The court granted the plaintiffs’ motion for default judgment against the individual defendants as to all claims except Rahman’s NYLL section 215 retaliation claim. The court noted that it had already granted default judgment against Red Chili. By separate order, it referred the matter to Magistrate Judge Barbara Moses for an inquest into damages and attorneys’ fees as to all three defendants. The opinion did not determine the amount of damages or attorneys’ fees.