Hernandez v. Manhattan Laundry Centers Inc

Background

On October 26, 2018, the court entered default on Fair Labor Standards Act liability against Manhattan Laundry Centers Inc., Precious 2 NY, Inc., Here to Clean, Inc., Eung Ho Kim, and Kris H Yun. The court referred the damages issue to Magistrate Judge Kevin Nathaniel Fox for an inquest, a proceeding used to determine the amount owed after liability has been established. Judge Fox recommended awarding zero damages.

Hernandez objected to that recommendation. She argued that her testimony and declaration established the amount of unpaid minimum and overtime wages, that she should have been allowed to correct filing errors, and that Judge Fox should not have relied on defendants’ evidence concerning a fire that allegedly destroyed the store and records. Judge Broderick reviewed the challenged portions of the recommendation independently and reviewed the remaining portions for clear error.

Unpaid wages and liquidated damages

Hernandez claimed $49,411.88 in minimum- and overtime-wage damages. She stated that she worked approximately 51 hours per week for most of the alleged employment period, later worked approximately 41 hours per week, and was paid a weekly salary without overtime pay. But her inquest testimony differed from her declaration: she acknowledged that she did not work the entire year every year and received varying wages while working fewer than 40 hours per week. She also did not provide the damages chart referenced in her filings or otherwise adequately explain how she calculated the claimed amount.

The court held that Hernandez had not established her unpaid wage damages with reasonable certainty, even when her estimates were considered. It therefore declined to award unpaid minimum-wage or overtime damages. Because liquidated damages under the federal and New York wage laws would equal the unpaid wages, the court also declined to award liquidated damages. The court agreed with Judge Fox that spread-of-hours damages could not be awarded because Hernandez had not requested them in her complaint, and a default award cannot exceed or differ in kind from the relief sought in the pleadings.

Wage-notice and wage-statement damages

New York Labor Law requires employers to provide wage notices at hiring and wage statements with each payment. Hernandez stated that during her more than six-year employment she never received documents showing her hours, pay rate, overtime, or other pay information. The court found that this assertion was not disputed and that the number of workdays clearly exceeded the statutory maximum periods.

The court awarded the maximum statutory damages of $5,000 for failure to provide wage notices and $5,000 for failure to provide wage statements, totaling $10,000. It rejected Judge Fox’s conclusion that these damages were contradictory or insufficiently certain.

Attorneys’ fees and costs

Hernandez requested $5,892 in attorneys’ fees and costs. The court found the attorneys’ overall hours reasonable, but reduced the award because Hernandez’s recovery was $10,000 and because multiple filing errors prevented an award of unpaid-wage damages. The court awarded $3,300 in fees and costs, consisting of $2,508 in attorneys’ fees and $792 in litigation costs.

Other objections and disposition

The court rejected Hernandez’s argument that she deserved another opportunity to correct the filings. It found that Judge Fox had already allowed post-inquest submissions and that Hernandez’s counsel chose not to amend the materials. The court also stated that it did not rely on defendants’ evidence about the fire or the March 2018 checks in calculating the award.

The court adopted the Report and Recommendation in part and rejected it in part. It ordered that Hernandez be awarded $10,000 in statutory damages and $3,300 in attorneys’ fees and costs, for a total of $13,300.