Castillo v. Isakov

Background

Nicholas Castillo, Armando Herrera, and Sheriddan Vasquez sued Roman Isakov, David Abramov, Vision Cellular Inc., and St Nicholas Mobile of NY Inc. under the Fair Labor Standards Act and the New York Labor Law. They alleged that they worked long hours selling cellphones, accessories, and plans but were paid flat weekly or daily amounts rather than legally required minimum and overtime wages. They also alleged that the defendants failed to provide wage notices and wage statements. Castillo additionally asserted discrimination and retaliation claims under the New York State Human Rights Law and New York City Human Rights Law based on his sexual orientation.

The defendants were served, the Clerk entered defaults against them, and none responded to the plaintiffs’ motion for default judgment. A default judgment is a judgment entered after a defendant fails to defend, but the court must still determine whether the pleaded facts establish legal liability and whether the claimed damages are supported by evidence.

Wage Claims

The court held that Vision Cellular and St. Nicholas Mobile were a single integrated enterprise under the federal and New York wage laws. The entities shared employees, sold the same types of products, and were owned and managed by Isakov and Abramov. The court therefore treated the entities as one employer for purposes of the wage claims.

The court held that the defendants violated the Fair Labor Standards Act and New York law by failing to pay overtime for work exceeding 40 hours per week. It also held that the defendants violated New York law by paying less than New York City’s applicable $15-per-hour minimum wage, failing to pay the additional minimum-wage hour required when employees worked more than 10 hours in a day, and failing to provide required wage notices and wage statements.

The court rejected the plaintiffs’ allegations that the violations were willful because those allegations were conclusory and unsupported by additional facts. It held that the plaintiffs were entitled to liquidated damages equal to 100 percent of their covered unpaid wages under the New York Labor Law, but not the higher damages available for willful violations. The plaintiffs could recover liquidated damages under either the federal or New York statute, but not duplicative liquidated damages under both. The court also held that the plaintiffs were entitled to reasonable attorney’s fees and costs.

Discrimination and Retaliation Claims

The court granted default judgment on Castillo’s discrimination claims under both New York human-rights statutes. It found that Castillo was in a protected class, was qualified for his job, suffered termination, and pleaded facts supporting an inference that his sexual orientation motivated the termination. The pleaded facts included Abramov’s homophobic remarks and threats to fire Castillo, followed by Castillo’s termination and replacement with a straight employee.

The court held that Abramov was individually liable under both statutes because he owned the entities, had hiring and firing authority, and directly participated in the discrimination. The entities were also liable. Under the New York State Human Rights Law, Abramov’s status as a high-level manager meant the entities’ responsibility for his conduct did not require a separate showing that they approved or condoned it. Under the New York City Human Rights Law, the entities were strictly liable for discrimination by a managerial or supervisory employee.

The court did not hold Isakov individually liable for the discrimination claims. Castillo alleged only that Isakov knew or should have known about Abramov’s conduct, which the court found conclusory; Castillo did not allege that Isakov actually participated in the discrimination.

The court denied default judgment on Castillo’s retaliation claims under both statutes. Castillo did not allege that he opposed the discrimination, filed a discrimination complaint, testified, or assisted an investigation before the alleged retaliation. His lawsuit was filed only after the alleged retaliation had occurred.

Damages and Disposition

The court found that a further inquiry into damages was necessary. The employment dates given for each plaintiff were not precise enough to calculate the wage damages, and the plaintiffs had to provide specific start and end dates as best they could. They also had to provide evidence of unpaid commissions, more information about Castillo’s efforts to find new employment and the severity of his emotional distress, and corrected records of attorney hours and costs because the submitted invoice was for the wrong case. The court noted that punitive damages were unavailable under the New York State Human Rights Law and required a more specific showing if Castillo continued to seek punitive damages under the New York City Human Rights Law.

Judge Liman granted in part and denied in part the default-judgment motion, referred the case to Magistrate Judge Gary Stein for an inquest into damages, directed the plaintiffs to submit supplemental materials and file a renewed motion for default judgment concerning damages, and directed the Clerk to close the pending motion.