Ocampo v. 455 Hospitality LLC

Background

Current and former employees of the Doubletree Hotel in Tarrytown, New York, sued 455 Hospitality, LLC and other defendants under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). They alleged unpaid minimum wages, overtime, gratuities, tips, recordkeeping violations, and wage-statement violations. The plaintiffs later added Alexander Sirotkin and Browne & Appel, LLC, collectively called the Sirotkin Defendants, alleging that they were joint employers.

The Sirotkin Defendants moved for summary judgment. Summary judgment is a decision without a trial when the evidence shows that no genuine dispute over an important fact requires a trial and the moving party is entitled to judgment under the law. The court considered the evidence in the light most favorable to the plaintiffs.

FLSA and NYLL employer claims

The court analyzed the FLSA and NYLL claims under the same employer-status standard. That standard examines the economic reality of the relationship, including whether the alleged employer hired or fired employees, controlled their schedules or working conditions, determined their pay, or maintained employment records. The court also considered whether Sirotkin exercised operational control—control over company operations in a way closely connected to the plaintiffs’ employment.

The plaintiffs admitted that Sirotkin did not hire or fire them, supervise them, control their schedules, set their employment conditions, determine their pay or payment method, maintain their employment records, maintain the Hotel’s bank records, or instruct the chief financial officer about their wages. No plaintiff communicated or interacted with Sirotkin about hiring, firing, compensation, or employment terms.

The plaintiffs argued that Sirotkin was involved in many aspects of the Hotel’s business, including hiring certain employees, approving compensation, participating in meetings, commenting on employee performance, and making broader business decisions. The court held that this evidence did not establish control over the plaintiffs’ employment. The court also found that the limited evidence that two plaintiffs saw an owner named “Alex” at the Hotel did not show employment-related control. It therefore dismissed the FLSA and NYLL claims against Sirotkin.

The court also rejected the argument that the Sirotkin Defendants were joint employers. It stated that the plaintiffs had not disputed the four control factors identified in the Department of Labor’s joint-employer rule and had not shown the required control over their employment.

Alter-ego and corporate-veil claims

The plaintiffs argued that the Sirotkin Defendants were alter egos of 455 Hospitality and that the court should disregard the company’s separate legal identity. Alter-ego or veil-piercing liability is not an independent claim; it is a way to impose liability for an underlying claim on an owner or related entity.

The court held that the plaintiffs offered no evidence that the Sirotkin Defendants operated 455 Hospitality as their own business, completely dominated it, or used its corporate form to commit fraud or injustice against the plaintiffs. Although the plaintiffs alleged that corporate funds were diverted for personal purposes, testimony from the Hotel’s chief financial officer and former general manager contradicted those allegations, and the plaintiffs provided no supporting evidence sufficient to create a factual dispute. The court also found that a $3 million transaction involving Sir Paul Realty did not support veil piercing against the Sirotkin Defendants.

The court dismissed the alter-ego and corporate-veil claims.

Breach-of-contract claim

The plaintiffs alleged that the employee manual was a contract requiring paid holidays. They did not specifically oppose or address the Sirotkin Defendants’ request for summary judgment on this claim. The court deemed the claim abandoned and dismissed it. Because it dismissed the claim on that basis, the court did not decide whether the manual created a contract involving the Sirotkin Defendants or whether the claim was timely.

Disposition

Judge Kenneth M. Karas granted the Sirotkin Defendants’ motion for summary judgment. The Clerk was directed to terminate the motion and enter judgment for Alexander Sirotkin and Browne & Appel, LLC. The opinion does not state that the ruling resolved the plaintiffs’ claims against the other defendants.