Chen v. Lilis 200 West 57th Corp.

Background

Chang Yan Chen sued Lilis 200 West 57th Corp., doing business as Lili’s 57 Asian Cuisine & Sushi Bar; 792 Restaurant Food Corp., doing business as Lilli and Loo; and several individuals under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL). Chen worked as a deliveryman for the restaurants between July 2014 and June 2019. He alleged that the defendants failed to pay required minimum wages and overtime premiums and failed to provide required wage statements and other records.

Pei Qin Li was the only person who opted into the conditionally certified FLSA group. The defendants moved for partial summary judgment on all of Li’s claims, all claims against Alan Phillips, Jonah Phillips, and Thean Chou Chong, and Chen’s NYLL recordkeeping claims. Summary judgment is a decision entered when the evidence shows no genuine dispute over a fact that could affect the result and the moving party is entitled to judgment under the law.

Li’s FLSA Claims

The court granted summary judgment on Li’s FLSA claims because they were time-barred. FLSA claims generally must be filed within two years, or within three years if the violation was willful. A willful violation requires evidence that the employer knew its conduct violated the law or recklessly disregarded that possibility.

The court had previously paused the limitations period for potential opt-in plaintiffs as of December 6, 2019. Because Li filed his consent to join the case on May 7, 2021, his claims were timely only if he worked for the defendants after December 6, 2017, or if the defendants’ violations were willful and he worked after December 6, 2016. The court found that Chen presented no evidence or argument supporting willfulness beyond the allegations in the complaint.

Li testified several times that he last worked at Lili’s 57 sometime in 2016. Although his interrogatory responses said he worked there into December 2018, he later testified that those responses were incorrect. The court relied on his deposition testimony rather than the contradictory interrogatory responses and found no genuine factual dispute about whether his FLSA claims were timely.

The court noted that Li might have timely NYLL claims because the NYLL has a six-year limitations period, but Li had opted into this case only to pursue FLSA claims. The court stated that any NYLL claims were not part of this lawsuit and would need to be pursued in a separate state-court lawsuit.

Claims Against Alan Phillips, Jonah Phillips, and Thean Chou Chong

The court granted summary judgment on all claims against Alan Phillips, Jonah Phillips, and Thean Chou Chong because Chen did not present a genuine factual dispute showing that any of them was his employer.

Under the FLSA and NYLL, an individual may be an employer when the person controls employment-related matters. Courts apply an “economic reality” test that considers whether the person had power to hire or fire employees, supervised or controlled work schedules or employment conditions, determined pay, or maintained employment records.

Alan Phillips was a part-owner of the restaurants, but the court found that he did not have the power to hire or fire employees, set their pay or schedules, or discipline them. His occasional signing of employee paychecks, assistance with lease negotiations, and general involvement in the businesses did not establish control over Chen’s employment.

Jonah Phillips had no ownership interest, position, or role at either restaurant and visited Lilli and Loo only a few times. The court found no factual basis to treat him as Chen’s employer.

Thean Chou Chong had managed Lili’s 57 until October 2017, but Chen began working there in April 2018. The court found that Chong’s management and Chen’s employment did not overlap. Chen’s work transporting supplies between the two restaurants did not show that Chong controlled Chen’s employment. The court also rejected reliance on Li’s overlapping employment because Li was dismissed from the case and Chen had to establish standing based on his own claims.

NYLL Recordkeeping Claims

The court dismissed Chen’s NYLL recordkeeping claims without prejudice for lack of standing. Article III standing requires a plaintiff to show a concrete injury, a connection between that injury and the challenged conduct, and a likelihood that a favorable decision would remedy the injury.

Chen alleged that missing or inaccurate payroll records, wage notices, and wage statements helped the defendants underpay him. The court found that these allegations did not show a distinct, concrete injury caused by the recordkeeping violations. The court also found that discrepancies in wage statements would have alerted Chen that he was being underpaid rather than caused a separate injury, and that Chen presented no evidence of concrete downstream consequences from the missing information.

Because the dismissal was for lack of standing, the court expressly dismissed the recordkeeping claims without prejudice.

Other Orders and Disposition

The court’s final order granted the defendants’ motion for partial summary judgment as to Li’s FLSA claims and all claims against Alan Phillips, Jonah Phillips, and Thean Chou Chong. It dismissed Chen’s NYLL recordkeeping claims without prejudice for lack of standing.

The court ordered Chen’s counsel to show cause, by sworn declaration, why sanctions should not be imposed for allegedly filing a false opt-in notice for Li. The court also set a trial date for May 8, 2023, required a letter concerning any intended class-certification motion, and directed the clerk to close the motion at docket entry 130. Judge Valerie Caproni signed the order on March 7, 2023.