Aguilar v. New Dairydel, Inc.

Background

Patricio Martinez Aguilar and Manuel Jesus Arizaga sued New Dairydel, Inc., Four Corners Foods Inc., DKLEE Realty Corp. doing business as Bagel Plus Deli, and several individual defendants. They brought the case for themselves and other similarly situated workers. The complaint asserted five claims: overtime violations under the Fair Labor Standards Act (FLSA); overtime violations under New York Labor Law (NYLL); violations of New York’s spread-of-hours rule; failures involving wage notices and records; and failures to provide required wage statements.

Aguilar alleged that he worked about 72 or more hours per week from around November 2018 through March 2021 but was paid $13.25 per hour without overtime pay. Arizaga alleged that he worked about 71 hours per week from around October 2015 through June 2018 and received a flat weekly payment of about $700 without overtime pay. Both alleged that they were not given paystubs or other written records and that the defendants did not track employee hours.

New Dairydel and Myeong Gu Kim filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. The other defendants were not moving defendants; the opinion notes that they had filed an answer.

Reasons for the ruling

The court held that Arizaga’s FLSA claim against New Dairydel and Kim was barred by the statute of limitations. The FLSA generally allows a claim to be filed within two years after it accrues, or three years for a willful violation. Even assuming Arizaga adequately alleged a willful violation, the complaint alleged that his employment ended around June 2018. The court therefore found that the three-year period expired in June 2021, before the action was filed on May 6, 2022. The court did not decide whether this limitations issue applied to the non-moving defendants.

As to Aguilar’s FLSA claim against Kim, the court applied the “economic realities” test for deciding whether an individual is an employer. The test considers whether the person had power to hire and fire workers, supervised or controlled schedules or working conditions, determined pay, and maintained employment records. The court found that Aguilar’s allegations merely repeated these factors in general terms and did not provide specific facts about Kim’s individual role. The court also noted that the complaint alleged that no employment-record system existed, although the absence of records alone would not necessarily defeat an employer claim.

As to Aguilar’s FLSA claim against New Dairydel, the court considered the “single integrated enterprise” test, which can treat affiliated companies as one employer when their operations, management, labor relations, and ownership are sufficiently connected. The court found that the complaint’s allegations of common management, pay practices, and payroll systems were conclusory and did not adequately allege centralized labor control, interconnected operations, or that New Dairydel functioned as Aguilar’s employer.

Because all federal claims against the moving defendants failed, the court declined to exercise supplemental jurisdiction—the authority to hear related state-law claims—over the NYLL claims against those defendants. The court therefore did not reach the merits of whether the defendants actually violated the wage laws.

Disposition

Judge Nelson S. Roman granted New Dairydel and Kim’s motion to dismiss the plaintiffs’ claims for FLSA overtime violations, NYLL overtime violations, NYLL spread-of-hours violations, NYLL notice and recordkeeping violations, and NYLL wage-statement violations. The claims were dismissed without prejudice, and the plaintiffs were granted leave to file an amended complaint by October 2, 2023. The order stated that any claims dismissed without prejudice would be deemed dismissed with prejudice if the plaintiffs did not file an amended complaint by that deadline. If an amended complaint were filed, all defendants were directed to answer or otherwise respond by October 23, 2023. The clerk was directed to terminate the motion at docket entry 27.