Khan v. AC Automotive, Inc.

Background

Amin Khan sued his former employer, AC Automotive, Inc., alleging violations of the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL). He alleged that he worked in AC Automotive’s warehouse from around May 2018 through June 12, 2020, lifting, packing, and handling auto parts. According to the complaint, he generally worked about 50 to 65 hours per week, was paid approximately $10 to $12 per hour, received only his regular rate for overtime hours, and was not paid at all for about three overtime hours each week. He also alleged that AC Automotive did not provide the wage notices and wage statements required by the NYLL.

AC Automotive was served with the summons and complaint but did not appear, answer, or respond to the motion for default judgment. The Clerk issued a certificate of default. Khan sought a default judgment totaling $94,138.

Liability

For a default judgment, the court accepted the complaint’s well-pleaded factual allegations as true for purposes of deciding liability. The court found AC Automotive liable under both the FLSA and NYLL for failing to pay the required overtime premium for work beyond 40 hours per week. Because the two overtime claims were identical, the court awarded overtime damages under the FLSA only.

The court separately found that AC Automotive violated the NYLL’s minimum-wage requirements. Khan’s alleged wages were below New York City’s statutory minimum wage during the employment period, although they were above the federal minimum wage. The court also found AC Automotive liable under NYLL §§ 195(1) and 195(3) for failing to provide the required wage notice and wage statements.

The court permitted Khan to pursue the FLSA claim for his entire employment period based on allegations that AC Automotive’s overtime violations were willful. For this purpose, a willful violation means that the employer knew, or recklessly disregarded whether, its conduct violated the law. The court stated that the allegations were close to conclusory but found that the alleged hours and complete failure to pay for some overtime supported an inference of willfulness.

Damages

Because AC Automotive allegedly did not maintain wage-and-hour records and did not rebut Khan’s estimates, the court accepted the estimates in his declaration for calculating damages. Khan estimated that he worked 57.5 hours per week and was paid $10 per hour in 2018, $11 per hour in 2019, and $12 per hour in 2020. The court calculated FLSA overtime damages using the applicable New York minimum-wage rates, resulting in $6,476.25 for 2018, $12,181 for 2019, and $5,024.25 for 2020, totaling $23,711.50.

For the NYLL minimum-wage claim, the court awarded $3,960 for 2018, $8,320 for 2019, and $2,760 for 2020, totaling $15,040. The court also awarded an equal amount in liquidated damages for the FLSA overtime violations and an equal amount in liquidated damages for the NYLL minimum-wage violations. Liquidated damages are additional damages equal to the unpaid wages or overtime at issue. The court found that AC Automotive had not established the good-faith defense needed to avoid the NYLL liquidated damages award.

For the missing wage statements and notices, the court awarded the statutory maximum of $5,000 for the NYLL wage-statement violation and $5,000 for the NYLL wage-notice violation, for a combined $10,000.

Disposition

The court granted Khan’s motion for default judgment. It ordered AC Automotive to pay $23,711.50 in FLSA overtime damages, $23,711.50 in FLSA liquidated damages, $15,040 in NYLL minimum-wage damages, $15,040 in NYLL liquidated damages, and $10,000 for the NYLL notice and statement violations—a total of $87,503. The Clerk was directed to enter judgment and close the case, and all motions were terminated.