Li v. SMJ Construction Inc.

Background

Zhi Li and Luxiu Sun brought claims under the Fair Labor Standards Act (FLSA), the New York Labor Law (NYLL), and the New Jersey Wage and Hour Law (NJWHL). They sought unpaid overtime, NYLL spread-of-hours compensation, damages for alleged unlawful deductions, wage-notice and wage-statement damages, liquidated damages, damages for checks returned for insufficient funds, prejudgment interest, and attorney’s fees.

The defendants were served but did not respond or appear. The court entered an order of default on December 10, 2020, and referred the case to Magistrate Judge Kevin Nathaniel Fox to determine damages. Judge Fox recommended $48,630 for Li, $1,212.84 for Sun, and $3,900 in attorney’s fees. Neither side objected to the recommendation. The district court therefore reviewed it for clear error, meaning an obvious mistake, and adopted it in part and modified it in part.

FLSA claims

The court found that the plaintiffs provided enough facts to establish their FLSA overtime claims. Li stated that he worked about 70 hours per week from January 1, 2017, through December 19, 2018, while Sun stated that he worked about 47.5 hours per week from August 27, 2018, through October 28, 2018. Both were paid flat daily rates regardless of the number of hours worked. The court also found sufficient allegations that SMJ was engaged in interstate commerce, including allegations about its revenue and Li’s transportation of supplies and equipment across state lines.

The court accepted the recommended FLSA damages calculations. Li was awarded $24,315 in unpaid overtime wages and $24,315 in liquidated damages, for a total of $48,630. Sun was awarded $606.42 in unpaid overtime wages and $606.42 in liquidated damages, for a total of $1,212.84. Because the defendants did not appear or provide evidence of a good-faith basis for their pay practices, the court awarded liquidated damages equal to the unpaid overtime amounts.

State-law claims

The court denied damages under the NYLL. Although the complaint alleged that the plaintiffs’ major work locations were in New York, the plaintiffs did not provide dates or specific periods showing that they performed the claimed work in New York. The court therefore concluded that they had not supplied enough facts to support NYLL damages. The court also adopted the finding that the plaintiffs had not established liability under the NJWHL because the record did not show the state in which they performed the work for which they sought overtime.

Attorney’s fees

The court modified Judge Fox’s recommended fee award. It found that counsel’s request for payment for 18.5 hours was reasonable, but counsel had not provided evidence supporting the requested hourly rate of $375. The court instead found that $250 per hour was reasonable. It therefore granted an attorney’s-fee award of $4,625.

Liability and disposition

The court concluded that Steve Kang was an employer under the FLSA because the allegations and evidence showed that he participated in SMJ’s daily operations, hired employees, controlled work schedules, salaries, and duties, and signed paychecks. The court held that Kang and SMJ were jointly and severally liable, meaning each could be held responsible for the full amount owed to the plaintiffs.

The court awarded Li $48,630 in damages, Sun $1,212.84 in damages, and the plaintiffs $4,625 in attorney’s fees. It adopted Judge Fox’s Report and Recommendation as described in the order, directed the Clerk of Court to enter judgment, and closed the case.