Hegazy v. The Halal Guys, Inc.

Background

The plaintiffs asserted claims under the Fair Labor Standards Act (FLSA) and New York Labor Law. Their FLSA claim alleged that the defendants failed to pay overtime wages at one-and-one-half times the regular rate for work exceeding 40 hours in a workweek. The plaintiffs sought conditional certification of an FLSA collective consisting of full-time, non-exempt food servers and food vendors who worked at the defendants’ food carts and restaurant stores in New York City from February 12, 2018, through the present.

Ahmed Hegazy and Ramiz Shehatta were the designated representative plaintiffs for the proposed FLSA collective. Shehatta alleged that he worked more than 70 hours per week at a Queens food cart and was paid a daily rate without overtime. Hegazy alleged that he regularly worked between 66 and more than 75 hours per week at food carts in Manhattan and likewise was not paid overtime. The plaintiffs also submitted declarations describing other workers who allegedly worked more than 40 hours per week without proper overtime pay and instances in which managers changed recorded work times.

Legal standard

The court applied the first step of the commonly used two-step process for FLSA collective actions. At this stage, plaintiffs must make a modest factual showing that they and other workers were victims of a common policy or plan that violated the law. The court does not resolve factual disputes, decide the ultimate merits, or determine witness credibility at this stage. If the collective later proves inappropriate after discovery, it may be decertified at the second step.

Conditional certification

The court held that the plaintiffs made the required modest factual showing. The evidence indicated that the representative plaintiffs and other food servers and vendors performed similar duties, worked overtime, and were subject to the same alleged policy of failing to pay overtime wages. The court rejected the defendants’ argument that potential collective members’ arbitration agreements prevented certification at this stage, explaining that issues concerning those agreements could be considered during the second step of the process.

Notice period and tolling

The court approved a three-year notice period because the plaintiffs alleged willful FLSA violations and neither side disputed using that period at this stage. The court explained that the limitations period continues to run for each potential collective member until that person files written consent to join the case.

The court granted the plaintiffs’ request to add 385 days based on tolling agreements. That 385-day extension applied to all defendants except The Halal Guys Franchise, Inc., which was not a party to those agreements. The resulting notice period was three years plus 385 days.

Notice and disclosure

The court approved the proposed notice and manner of distribution as amended. The notice must identify the defendants’ law firm, state that the defendants deny liability, and explain that people who join may be required to provide documents and give depositions. The defendants must permit posting in a common, non-public employee space and, when possible, the notice may be sent by email, text message, and social media message. The court also granted permission for reminder notices halfway through the opt-in period.

The defendants were ordered to provide plaintiffs’ counsel with an electronic list of qualifying workers employed during the relevant period, including names, last known contact information, employment dates and locations, and positions held. The plaintiffs were required to publish the notice by October 15, 2022, and potential members were given 45 days to join, or until November 29, 2022.

Disposition

Judge Lorna G. Schofield ordered that conditional certification of the FLSA collective was GRANTED. The plaintiffs’ motion for 385 days of tolling was GRANTED, and the proposed form and manner of notice were APPROVED as amended. The order addressed whether notice could be sent and who could receive it; it did not decide the ultimate merits of the overtime claims.