Nikonov v. Flirt Ny Inc.

Background

Denys Nikonov sued Flirt NY, Inc., and other defendants. He asserted wage-and-hour claims under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL), as well as disability-discrimination claims under the New York State Human Rights Law (NYSHRL) and New York City Human Rights Law (NYCHRL).

Defendants moved for summary judgment under Rule 56 of the Federal Rules of Civil Procedure. They sought dismissal of the FLSA claims and asked the court to decline supplemental jurisdiction over the NYLL, NYSHRL, and NYCHRL claims. Because defendants presented material outside the pleadings, the court treated the motion as one for summary judgment rather than as a motion to dismiss.

FLSA Claims

The FLSA provides minimum-wage and overtime protections when either the employee or the employer’s business meets the statute’s commerce requirements. For enterprise coverage, the business must have employees handling goods or materials that moved in interstate commerce and must have annual gross revenue of at least $500,000.

Defendants relied on a 2019 tax return, not produced during discovery, showing gross sales of $283,300. Nikonov argued that he handled, sold, and worked with beauty products and supplies that moved in interstate commerce. He also submitted an affidavit stating that three to five hairstylists worked on a typical day, the average hair-styling service cost $300, each stylist performed at least three services per day, and the business operated seven days a week.

The court agreed that the record supported the interstate-commerce requirement and found a genuine dispute about the business’s annual revenue. Drawing reasonable inferences in Nikonov’s favor, the court concluded that the styling services alone could have produced more than $500,000 annually. The jury, rather than the court, would decide the facts and determine what weight to give the tax return and Nikonov’s sworn testimony. The court therefore denied summary judgment on the First and Third Causes of Action, the FLSA claims.

NYLL Claims

The Second, Fourth, Fifth, Sixth, and Seventh Causes of Action asserted NYLL claims. Defendants had asked the court to decline supplemental jurisdiction over those claims if the FLSA claims were dismissed. Because the court did not dismiss the FLSA claims, it found no basis to dismiss the NYLL claims, which arose from the same facts. The court therefore denied summary judgment on those five NYLL causes of action.

NYSHRL and NYCHRL Claims

The Eighth and Ninth Causes of Action asserted disability-discrimination claims under the NYSHRL and NYCHRL. Supplemental jurisdiction allows a federal court to hear certain related state-law claims that form part of the same constitutional case or controversy as claims within the court’s original jurisdiction.

The court found that Nikonov’s disability claims—concerning employment actions allegedly taken because of his migraines and swollen feet—did not share a common nucleus of operative fact with his wage-and-hour claims. The federal claims were wage and overtime claims, not federal disability-discrimination claims. The court therefore held that it lacked supplemental jurisdiction over the state and city disability claims and dismissed the Eighth and Ninth Causes of Action without prejudice.

Other Rulings and Disposition

The court deferred ruling on whether certain sealed filings concerning a potential witness should be unsealed until it determined whether the witness would testify at trial. It stated that, if Nikonov refiled the disability claims in New York state court, he would have to disclose the information in those sealed portions to the state-court judge.

The court granted in part and denied in part defendants’ motion for summary judgment. It granted the motion only to the extent that the Eighth and Ninth Causes of Action were dismissed without prejudice; otherwise, it denied the motion. The court scheduled a jury trial on the remaining claims.