Hidalgo v. Torti Food, Corp.

Background

A trial took place on October 10 and 11, 2023. After testimony ended but before the jury charge, the parties entered into a stipulation resolving the action. They later filed submissions concerning damages.

The parties agreed that judgment should be entered for Yovanny Hidalgo for $5,600 in minimum wages based on denial of the tip-wage credit, $7,935.01 in overtime wages based on a stipulated overtime rate of $16 per hour, and $3,300 in spread-of-hours wages. The defendants agreed to approximately $1,500 in prejudgment interest, while Hidalgo requested $1,514. The defendants did not consent to liquidated damages or attorneys’ fees and costs. Hidalgo requested $16,835.01 in liquidated damages and $57,593.52 in attorneys’ fees and costs.

Liquidated damages

The Fair Labor Standards Act and New York Labor Law generally provide liquidated damages equal to unpaid wages. An employer may avoid or reduce liquidated damages by showing both that it acted in good faith and that it had reasonable grounds to believe its conduct complied with the law.

The defendants argued that they acted in good faith because an individual defendant had worked for years as a waitress, they hired an accountant to ensure compliance, their tip-wage notice complied with some legal requirements, and they were unaware of the spread-of-hours rule. The court found these explanations insufficient. It held that relying on restaurant-industry experience, hiring an accountant, partially complying with the law, or being unaware of the law did not meet the demanding good-faith standard. The court therefore included $16,835.01 in liquidated damages in the judgment.

Attorneys’ fees and costs

Under the Fair Labor Standards Act and New York Labor Law, a successful employee may recover reasonable attorneys’ fees and costs. The court used a lodestar calculation—the reasonable hourly rate multiplied by the reasonable hours worked—to evaluate the fee request.

The court found that Hidalgo’s attorney’s $400 hourly rate was appropriate and that the documented work produced a lodestar fee of $54,440. The court declined to reduce that amount. Although the case involved one plaintiff and was described as a straightforward wage action, it continued for nearly two years and reached a two-day trial. The court also noted that applicable law does not impose a proportionality limit tying attorneys’ fees to the amount recovered by the plaintiff. The court approved $3,153.52 in costs, including reasonable expenses such as a trial interpreter.

Disposition

The court approved the parties’ resolution as fair and reasonable and directed the Clerk of Court to enter judgment for Hidalgo against the defendants in the total amount of $92,777.54, consisting of:

- $5,600.00 in minimum wages; - $7,935.01 in overtime wages; - $3,300.00 in spread-of-hours wages; - $1,514.00 in prejudgment interest; - $16,835.01 in liquidated damages; - $54,440.00 in attorneys’ fees; and - $3,153.52 in costs.

The order delayed payment of attorneys’ fees, but not costs, until the amounts owed to Hidalgo were distributed. The Clerk was directed to close the case.