Lucero v. Shaker Contractors, Corp.

Background

Luis Lucero, Joaquin Colin, and Jose Argueta sued their employer, Shaker Contractors, Corp., and its principal, Sher Gul. They alleged violations of the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL). After the defendants failed to appear or respond, the court entered a default judgment for the plaintiffs. The case was referred to Magistrate Judge Jennifer E. Willis to determine damages. Judge Willis recommended $863,489.32 in damages, plus interest, and $22,913.20 in attorney’s fees and costs. The plaintiffs objected to four parts of that recommendation.

Rulings on the objections

The court sustained the plaintiffs’ objection to the overtime methodology. Because the plaintiffs had already received their regular hourly pay for overtime hours, the damages calculation had to award only the additional overtime premium they should have received. The court set unpaid-overtime damages at $17,592.00 for Lucero, $43,670.59 for Colin, and $76,694.23 for Argueta, for a total of $137,956.82.

The court also sustained the objection concerning Argueta’s spread-of-hours damages. New York law requires an additional hour of pay at the basic minimum wage when an employee’s workday exceeds ten hours. Based on the complaint’s allegations and the defendants’ default, the court inferred that Shaker Contractors employed more than eleven employees in 2019, making the applicable minimum wage $15.00 per hour rather than $13.50. Argueta’s total spread-of-hours damages were therefore increased to $6,300.00.

The court awarded damages for bounced checks. The plaintiffs provided sworn testimony that checks issued for their work were dishonored and that they were not otherwise paid. The awards were $4,000.00 for Lucero, $5,900.00 for Colin, and $4,300.00 for Argueta, totaling $14,200.00.

The court rejected the recommendation to reduce plaintiffs’ counsel’s billing rates because of errors in the damages calculations, finding that the errors were not sufficiently serious to justify a reduction. It approved hourly rates of $450.00 for Kenneth Katz, $375.00 for Adam Sackowitz, and $325.00 each for Eliseo Cabrera and Nicola Ciliotta.

Wage-record claims

The report recommended $10,000.00 in damages for each plaintiff under NYLL provisions requiring wage notices at the beginning of employment and wage statements when employees are paid. The court dismissed those claims because the plaintiffs had not alleged a concrete injury caused by the failure to provide the required records. The court awarded no damages for those alleged violations.

Final disposition

The court found no clear error in the unobjected-to portions of the report, including the recommendations concerning liquidated damages, compensable attorney time, costs, prejudgment interest, and a possible additional penalty for an unpaid judgment. It adopted the report with modifications and directed entry of judgment for the plaintiffs in the total amount of $346,913.64: $137,956.82 in unpaid overtime wages, $6,300.00 in unpaid spread-of-hours wages, $14,200.00 for wages represented by bounced checks, and $158,456.82 in liquidated damages. The judgment also includes prejudgment interest at 9%, accruing from the midpoint of each plaintiff’s employment, and an additional 15% penalty if unpaid after 90 days. Plaintiffs’ counsel was awarded $24,595.70 in fees and costs. The Clerk was directed to enter judgment and terminate the case.