Cheng v. Via Quadronno LLC

Background

Chunyung Cheng and Shiguang Chen sued defendants over alleged unpaid overtime under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL), as well as alleged failures to provide required wage notices. The court had previously approved a conditional FLSA collective action, and Marciano E. Espinal filed a consent to become an FLSA party plaintiff on January 3, 2022.

The plaintiffs moved under Federal Rules of Civil Procedure 15, 16, and 21 to file a third amended complaint and add Espinal as a named plaintiff. The proposed amendment also sought to add Via Quadronno Madison LLC doing business as Via Quadronno 88" Street, Caffe Centrale LLC doing business as Antica Bottega Dela Vino, and BVS 1228 LLC doing business as Via Quadronno 88" Street; add joint-employer and single-enterprise allegations; add NYLL class-action allegations; add an alleged pseudonym for an individual defendant; and assert additional NYLL claims.

Legal standards

Rule 15 generally allows amendment with the court’s permission when justice requires, while Rule 21 permits adding a party on just terms. Because the motion came after the amendment deadlines in the court’s case-management orders, Rule 16 also applied. Under Rule 16, the plaintiffs had to show “good cause,” meaning diligence showing that the deadline could not reasonably have been met despite their efforts. Even when good cause exists, the court may deny an amendment if it would be futile, unfairly prejudicial, or otherwise improper.

Court’s analysis

The court found good cause to add Espinal as a plaintiff and to allow him to assert NYLL claims for overtime and failure to deliver wage notices. Espinal had opted in on January 3, 2022, within the court’s deadline for opt-in consents, and the defendants identified no prejudice from allowing those claims. The court explained that Espinal’s opt-in notice made him a plaintiff for FLSA purposes but did not automatically add him to the NYLL claims.

The court denied the requested addition of the three corporate defendants. The plaintiffs had filed multiple complaints, discovery had closed, and they did not adequately explain why the information about those entities could not have been discovered before the amendment deadline. The court also rejected the plaintiffs’ reliance on a change in counsel and their desire to wait until the opt-in period ended.

The court further concluded that the proposed allegations that the corporate defendants operated as a unified enterprise were insufficient. Under the FLSA and NYLL, separate corporations may be treated as one employer in some circumstances, but common ownership and a common business purpose alone are not enough. The proposed complaint did not allege sufficient interrelated operations or centralized control of labor relations.

The court denied the proposed additional NYLL claims for Cheng and Chen involving spread-of-hours pay, meal periods, recordkeeping, and time-of-hire wage notices because the plaintiffs did not show why those claims could not have been asserted earlier. The court did not decide the parties’ dispute over whether some meal-period and recordkeeping claims have a private right of action. The court also did not address certain arguments about claims against KC Lam and Xiu Yong Chen or the Doe defendants because the plaintiffs had agreed to withdraw those claims.

Disposition

The court granted the motion to amend in part and denied it in part. The plaintiffs received leave to file an amended complaint by May 2, 2022, adding Espinal and his FLSA and NYLL claims for unpaid wages and NYLL wage-notice violations. The court stated that this permission was without prejudice to the defendants moving for judgment on the pleadings or summary judgment on those claims. The court also ordered a telephonic status conference for May 17, 2022, and directed the clerk to close Docket No. 84.