Bautista v. ABC Corp.

Background

Mario Bautista moved for default judgment under Federal Rule of Civil Procedure 55(b)(2) against ABC Corp. d/b/a Ocean Restaurant, John Doe, and “Lin” Doe. The claims arose under the Fair Labor Standards Act (FLSA), the federal law governing minimum wages and overtime, and the New York Labor Law (NYLL). The defendants did not formally appear or respond.

Bautista alleged that he worked as a delivery worker for ABC Corp. from about October 24, 2014, through March 2016. He alleged working approximately 74 to 81 hours per week, receiving weekly cash payments of $300 and later $350, and receiving no overtime pay. He also alleged that ABC Corp. required him to purchase and maintain an electric bicycle for deliveries without reimbursement. The court treated the well-pleaded allegations as admitted because of the defendants’ default.

The complaint also asserted claims for a Fair Labor Standards Act collective action, but Bautista’s default-judgment motion sought relief only for himself. Because no collective action had been certified and no other workers had joined, the court treated the collective-action request as waived and limited its decision to Bautista’s individual claims.

Rulings on ABC Corp.

The court applied the factors used for default judgment: whether the default was willful, whether the defendant had a potentially meritorious defense, and whether denying judgment would prejudice the plaintiff. It found that all three factors favored Bautista as to ABC Corp. ABC Corp. had been served but did not answer, appear, request additional time, or respond to the motion.

The court then determined whether Bautista had established liability for each claim and the amount of damages. It found that the allegations established an employment relationship under both the FLSA and the NYLL. The court also found that ABC Corp. was an enterprise engaged in interstate commerce under the FLSA, based on allegations about its restaurant operations, sales, and purchases of food, supplies, and equipment from outside New York and internationally.

The court found ABC Corp. liable for minimum-wage and overtime violations under both statutes. It awarded $1,180 for unpaid minimum wages and $45,465.96 for unpaid overtime. Because Bautista could recover only once for the same wage violations, the court used the overlapping protections of the FLSA and NYLL without awarding duplicate recovery.

The court also found liability under the NYLL for spread-of-hours pay, which provides additional pay when an employee’s workday stretches beyond ten hours. It awarded $6,585.22 for that violation. The court found that ABC Corp. failed to provide a required wage notice at hiring and required pay statements, and awarded the statutory maximum of $10,000 for those violations.

The court treated the electric bicycle as a tool of the trade that ABC Corp. required Bautista to use. It awarded $3,150 for the bicycle’s purchase, maintenance, and repairs.

Additional awards

The court awarded liquidated damages under the NYLL, rather than under both the NYLL and the FLSA. Liquidated damages are additional amounts imposed for certain wage violations. The award was $53,231.18, equal to Bautista’s unpaid minimum wages, overtime, and spread-of-hours compensation.

The court awarded $27,786.68 in prejudgment interest at 9 percent per year on the $53,231.18 wage-related damages, calculated from June 12, 2015, through entry of judgment. It also awarded $6,845 in attorney’s fees and $610 in administrative costs. Post-judgment interest was awarded at the rate provided by federal law, beginning when the Clerk entered judgment and continuing until payment.

Ruling on the Doe defendants and disposition

Judge Laura Taylor Swain granted Bautista’s motion for default judgment against ABC Corp. only and awarded total damages, prejudgment interest, attorney’s fees, and costs of $154,854.04. She denied default judgment against John Doe and “Lin” Doe because they were unidentified and had not been properly served. The court dismissed all claims against those defendants without prejudice and directed the Clerk to enter judgment and close the case.