Chen v. Hunan Manor Enterprise, Inc.

Background

Nine plaintiffs sued Hunan Manor Enterprise, Inc., Hunan Manor LLC, Hunan House Manor Inc., Hunan House Restaurant, Inc., Hunan House Restaurant NY LLC, Hunan House, Inc., A Taste of Mao, Inc., Jingchao Li, Zhida Li, and Zhenqi Xiao. They alleged violations of the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL), including failure to pay minimum wages, overtime wages, and spread-of-hours pay, and failure to provide required wage notices and wage statements.

The court held a bench trial from February 13 through March 13, 2023. All plaintiffs appeared and testified except Yong Kang Liu and Jixiang Wang. The court found that the defendants’ employment records were inadequate and often inaccurate, so it relied on available documents and credible testimony to estimate hours worked, pay rates, and compensation.

Main Findings

The court found that Hunan House Restaurant, Hunan House Manor, Hunan House, and China Xiang were a single integrated enterprise. The restaurants moved employees between locations, shared control over hiring, firing, schedules, pay, and working conditions, and had common management, ownership, and financial control. The defendants therefore were jointly and severally liable as a single employer for the wage violations found.

The court also found that the defendants were the plaintiffs’ employers under both the FLSA and NYLL. The individual defendants had authority over hiring, firing, work schedules, working conditions, pay, and employment records. The court found that the FLSA violations were knowing and willful, allowing use of the FLSA’s three-year limitations period.

Disposition of Claims

The court dismissed Yong Kang Liu’s and Jixiang Wang’s claims with prejudice under Federal Rule of Civil Procedure 41(b). The court found that both had voluntarily left the United States, failed to inform their attorney for more than three years that they had left with no plans to return, and thereby procured their own absence from trial. Their deposition testimony could not be used as a substitute for their live trial testimony under the circumstances described in the opinion.

The court found that the defendants violated the FLSA and NYLL overtime requirements as to Shi Ming Chen, Lianhe Zhou, Wei Min Zhu, Baojun Tian, Qifang Chen, and Pingjin Fan. Xinlong Liu did not prove that he worked more than 40 hours per week and therefore was not entitled to overtime pay.

The court found that Baojun Tian, Xinlong Liu, and Qifang Chen were entitled to minimum-wage backpay. The defendants could not use tips to satisfy part of the minimum wage because they did not prove that they gave the required tip-credit notices.

The court found that none of the plaintiffs was entitled to spread-of-hours pay. The eligible plaintiffs did not prove that their workdays lasted more than 10 hours.

Although the defendants failed to provide proper wage notices and wage statements, the court held that the plaintiffs lacked standing to recover damages for those violations because they did not show a concrete injury. The court dismissed those claims for lack of subject-matter jurisdiction; the opinion does not state that this dismissal was with or without prejudice.

Damages and Further Proceedings

The court awarded actual and liquidated damages to seven plaintiffs as follows:

- Shi Ming Chen: $191,833.60 in overtime damages, for a total of $383,667.20 including liquidated damages. - Lianhe Zhou: $16,800.80 in overtime damages, for a total of $33,601.60 including liquidated damages. - Wei Min Zhu: $33,258.80 in overtime damages, for a total of $66,517.60 including liquidated damages. - Baojun Tian: $3,468.75 in minimum-wage and overtime damages, for a total of $6,937.50 including liquidated damages. - Xinlong Liu: $5,633.50 in minimum-wage damages, for a total of $11,267.00 including liquidated damages. - Qifang Chen: $9,529.05 in minimum-wage and overtime damages, for a total listed in the opinion of $19,058.10 including liquidated damages. - Pingjin Fan: $47,668.70 in overtime damages, for a total listed in the opinion of $95,337.40 including liquidated damages.

The opinion’s findings state a total award of $616,386.40 plus applicable interest, while its conclusion states that the defendants are jointly and severally liable for $616,386.46 plus applicable interest. The opinion therefore contains an unexplained six-cent inconsistency in the total. It awards prejudgment interest at 9 percent per year on each plaintiff’s actual damages from the midpoint of that plaintiff’s employment through entry of judgment, and post-judgment interest under 28 U.S.C. § 1961.

The plaintiffs were entitled to attorney’s fees and costs under the FLSA, but had not yet submitted their costs. The court directed them to file an application for attorney’s fees within 14 days after entry of judgment, with the defendants’ opposition due 14 days later and any reply due seven days after that. The fee application was to be referred to Magistrate Judge Gorenstein.