Ergin v. 8th Hill Inc.

Background

Mehmet Emre Ergin sued 8th Hill Inc., Semi Feyzioglu, and Taniyel Cigercioglu. He alleged that he worked as a sous chef at 8th Hill from August 6, 2019, through March 16, 2020. According to the amended complaint, he worked 10 to 15 hours per day for six days a week during part of that period and 10 hours per day for five days a week during the remainder. He alleged that he was paid $16.66 per hour, was not paid overtime or spread-of-hours wages, and received no wages for work from March 2 through March 16, 2020.

Ergin asserted claims under the Federal Labor Standards Act (FLSA) and New York Labor Law. The claims included unpaid minimum wages, unpaid overtime, unpaid spread-of-hours wages, failure to provide required pay notices, inadequate recordkeeping, and failure to provide wage statements. He also alleged that the violations were willful.

The defendants did not participate in the litigation after being served. The Clerk’s Office entered defaults against the defendants, and Ergin filed two motions for default judgment.

Court’s analysis

Under Federal Rule of Civil Procedure 55, default judgment is a two-step process. After a defendant’s default is entered, the court must still determine whether the complaint’s factual allegations establish a legal basis for liability. The court accepts well-pleaded allegations as true, but allegations about the amount of damages are not automatically accepted as true.

The court concluded that Ergin adequately alleged that he was an employee and that 8th Hill, Feyzioglu, and Cigercioglu were joint employers under the FLSA. The allegations stated that 8th Hill operated a restaurant, that the individual defendants were principals or shareholders, and that they had authority over hiring, termination, pay, and scheduling. The court also found sufficient allegations that the business was involved in interstate commerce and that Ergin worked hours for which he was not paid minimum wages or overtime.

The court found that the same allegations established liability for the New York minimum-wage and overtime claims. It also found sufficient allegations for the New York spread-of-hours claim, based on workdays exceeding 10 hours without the required additional payment. Finally, the court found sufficient allegations that the defendants failed to provide required hiring notices and wage statements and failed to maintain required records.

The court did not determine the amount of damages. It found several problems in Ergin’s calculations. His briefing asserted, for the first time, that he was not paid for hours beyond 60 per week, but that allegation was not in the complaint. His minimum-wage calculation used his usual hourly rate instead of the applicable federal and New York minimum wages. The court also identified errors in calculating overtime hours and a final total that did not add up. Because these errors prevented the court from determining damages with reasonable certainty, it referred damages and the request for attorneys’ fees and costs to a magistrate judge for an inquest.

Disposition

Judge Alison J. Nathan granted Ergin’s motions for default judgment against all three defendants and entered judgment as to their liability. By separate order, the court referred the matter to a magistrate judge for an inquest to determine damages and calculate attorneys’ fees and costs. The opinion states that this resolved docket numbers 27 and 38.