Alvarado Balderramo v. Go New York Tours Inc.

Background

Victor H. Alvarado Balderramo and Luis Falquez, along with other bus-driver plaintiffs, sued Go New York Tours Inc. and its president and owner, Asen Kostadinov. The plaintiffs asserted claims under the Fair Labor Standards Act (FLSA), New York Labor Law (NYLL), the Minimum Wage Act (MWA), and the Wage Theft Prevention Act (WTPA). They alleged that the defendants failed to pay minimum wages, overtime at one and one-half times the regular rate, spread-of-hours pay, and uniform-maintenance pay. They also alleged that the defendants failed to provide required hiring notices, wage statements, and minimum-wage notices.

The court had previously certified a class of Go New York tour bus drivers under Rule 23 and a collective action under the FLSA. The opinion addressed the defendants’ motion for summary judgment, the defendants’ motion for sanctions, and the plaintiffs’ cross-motion for partial summary judgment. The court stated that it would decide liability issues but not the full amount of damages.

Summary-judgment rulings

The court held that the plaintiffs’ estimates of their hours worked were sufficient to survive summary judgment. The defendants had not preserved certain timesheets, text messages, or other scheduling evidence, and the parties disputed the accuracy and meaning of other records. The court also found material factual disputes about whether Alvarado, Falquez, and another driver received cash payments for overtime. Accordingly, the court denied the defendants’ motion for summary judgment on the FLSA overtime claim.

The defendants admitted that, before October 6, 2014, Go New York did not pay drivers one and one-half times their regular rates for hours worked over 40 in a week. The court therefore granted the plaintiffs’ motion for summary judgment on liability for unpaid overtime wages owed to class members before October 6, 2014. The court separately stated that it was not deciding damages at that stage, although it granted the plaintiffs’ motion as to the currently discernable damages for unpaid overtime in its conclusions.

The court denied the defendants’ motion for summary judgment on the uniform-maintenance claim. The required uniform was provided to drivers, but the defendants did not argue that they laundered the uniforms or reimbursed drivers for maintenance. The court held that the plaintiffs did not need to show that the uniforms required special maintenance to pursue the claim.

The court denied the defendants’ motion for summary judgment on the MWA minimum-wage claim. Although the defendants produced records showing hourly pay at or above the applicable minimum wage, the plaintiffs argued that their total pay divided by all hours actually worked resulted in an effective rate below minimum wage. The court found a genuine factual dispute about whether the plaintiffs were paid the required minimum wage.

The court granted the defendants’ motion for summary judgment on the timely-wage claim. Under New York law, the weekly-payment requirement applied to “manual workers.” After considering the drivers’ duties—including driving, refueling, inspecting buses, and interacting with customers—the court found that the plaintiffs were not manual workers. The court therefore held that they were not entitled to the protections of the weekly-payment provision at issue. The court denied the plaintiffs’ cross-motion on this claim.

Wage notices, wage statements, and spread-of-hours pay

The court granted the plaintiffs’ motion for summary judgment on the claim that the defendants failed to provide compliant hiring notices under NYLL § 195(1). The employment letter and handbook did not include the employer’s address and telephone number, and the record did not establish that the required information was provided in the employees’ primary languages. The court also rejected the argument that later paychecks cured the deficiency because the defendants’ own records showed that some employees did not receive their first paychecks within the required period.

The court denied the defendants’ motion for summary judgment on the wage-statement claim under NYLL § 195(3). The pay statements did not consistently list overtime hours or the overtime rate of pay, even when separate handwritten records reflected overtime. The court concluded that the defendants violated the wage-statement requirement before October 6, 2014. The conclusion section identifies the plaintiffs’ motion as granted on liability for both defective hiring notices and inaccurate weekly wage statements.

The court denied both sides’ motions for summary judgment on spread-of-hours wages. New York’s rule generally provides an additional hour of pay at the basic minimum wage when an employee’s workday exceeds ten hours, but eligibility depends in part on whether the employee was paid no more than the minimum wage. Because the court found a factual dispute about minimum-wage payments, it also found that the dispute prevented summary judgment on the spread-of-hours claim.

Affirmative defenses and sanctions

The court granted the plaintiffs’ motion for summary judgment dismissing the defendants’ affirmative defenses of unclean hands and laches. Unclean hands is an equitable defense generally applicable to equitable claims, while the plaintiffs’ claims were statutory claims for damages. Laches, which addresses unreasonable delay causing prejudice, was also inapplicable because the claims were governed by statutory limitation periods.

The court denied the defendants’ motion for sanctions. For sanctions under Federal Rule of Civil Procedure 11, the defendants had not complied with the rule’s requirement to serve a separate sanctions motion and provide a 21-day period to withdraw or correct the challenged filings. The court also found that the defendants had not made the clear showing of bad faith required for sanctions under 28 U.S.C. § 1927. The court further declined to disqualify the plaintiffs’ law firm as class counsel.

Joint employment and FLSA coverage

The court granted the plaintiffs’ motion for summary judgment finding that Go New York and Kostadinov jointly employed the class. Applying the economic-reality test, the court found that Kostadinov had authority to hire and fire employees and to set wages and schedules. It found that Go New York tracked hours, managed drivers, determined and distributed wages, and maintained employment records.

The court also granted the plaintiffs’ motion for summary judgment finding that Go New York was covered by the FLSA. The company’s annual gross sales exceeded $500,000 by 2013, and the defendants had stipulated that employees were engaged in commerce. Those facts satisfied the requirements for enterprise coverage under the FLSA.

Prejudgment interest and automatic increase

The court granted the plaintiffs’ request for prejudgment interest on wages owed under New York law. It explained that prejudgment interest may not be added to liquidated damages under the FLSA, but generally must be awarded under the NYLL in addition to liquidated damages. The court also granted the request for an automatic 15 percent increase in any judgment amounts that remain unpaid after the period specified by the NYLL.

Disposition

The court granted in part and denied in part the defendants’ motion for summary judgment and denied the defendants’ motion for sanctions. It granted the defendants’ motion for summary judgment on the timely-wage claim and denied summary judgment on the other claims addressed in that motion.

The court granted in part and denied in part the plaintiffs’ cross-motion for partial summary judgment. It granted the plaintiffs’ motion concerning compliant hiring notices and wage statements, dismissal of the unclean-hands and laches defenses, joint employment, FLSA coverage, unpaid overtime premium before October 6, 2014, and prejudgment interest. It denied the plaintiffs’ motion concerning untimely wages and related liquidated damages, spread-of-hours liability and related liquidated damages, and liquidated damages for unpaid overtime.

The surviving claims identified by the court were unpaid spread-of-hours wages, damages for unpaid spread-of-hours wages, and damages for failure to pay overtime premiums. The court directed the parties to appear for a telephonic conference.