Hernandez v. 2400 Amsterdam Ave. Realty Corp.

Background

Juan Hernandez sued several defendants for allegedly unpaid minimum and overtime wages under the Fair Labor Standards Act and the New York Labor Law. From February 2019 through August 2021, Hernandez worked as a superintendent at three buildings owned by 2400 Amsterdam Avenue Realty Corp. He testified that Atanasio Cortez hired him and told him how much he would be paid. Hernandez responded to tenant repair requests and complaints, cleaned the buildings and sidewalks, and received work assignments from Atanasio and Ricardo Cortez.

2400 Amsterdam Realty hired Rick Elezi Management, Inc., doing business as REM Residential, to manage the buildings. Alana Stridiron, a REM employee, served as the property manager. REM handled tasks such as collecting rent, lease signings, requested letters, and other paperwork. REM also issued checks from 2400 Amsterdam Realty’s operating account, but it did not keep files concerning 2400 Amsterdam Realty’s employees.

REM and Stridiron—the “REM Defendants”—moved for summary judgment, arguing that they were not Hernandez’s employers. Summary judgment is a decision entered without a trial when the evidence shows no genuine dispute over a fact that could affect the result and the moving party is entitled to judgment under the law.

Court’s analysis

The court applied the Fair Labor Standards Act’s broad definition of “employer,” which can include more than one employer. It used the economic-realities analysis, asking whether the alleged employer had power to control the worker. The court considered both formal control and functional control. The New York Labor Law uses an employer definition that the court treated as coextensive with the federal law for this analysis.

Under the formal-control test, the court considered whether the REM Defendants had the power to hire or fire Hernandez, supervised or controlled his work schedule or employment conditions, determined his pay rate and payment method, and maintained employment records.

The court concluded that none of these factors established formal control. The evidence showed that Atanasio made the hiring and firing decisions, and that Atanasio and Ricardo supervised Hernandez and assigned his work. Although REM and Stridiron’s names appeared on checks and the termination letter, the court found that the letter reflected Stridiron’s role in sending a letter at Atanasio’s request, not authority to fire Hernandez. Atanasio set Hernandez’s pay rate. REM had some control over the method of payment because it issued checks, but the court found that factor inconclusive. REM did not maintain records of Hernandez’s hours or other employment records relevant to the wage claims.

The court also considered functional control, which examines the broader economic relationship between the worker and the alleged employer. Hernandez did not address the REM Defendants’ functional-control argument in his opposition. Even considering the evidence, the court found no genuine factual dispute. Five factors weighed against finding functional control, including the lack of evidence that Hernandez used REM’s premises or equipment, that REM supervised his work, that his job was integral to REM’s property-management services, or that the work would have continued with REM if the buildings had been sold. One factor—whether Hernandez worked exclusively or mainly for the alleged employers—leaned slightly in Hernandez’s favor because 2400 Amsterdam Realty did not use another property-management service during his employment.

Because a reasonable jury could not find that the REM Defendants exercised either formal or functional control over Hernandez, the court granted their motion for summary judgment.

Other ruling and next steps

The REM Defendants also sought attorney fees based on Hernandez’s refusal to dismiss his claims against them. The court treated that request as one for sanctions under Federal Rule of Civil Procedure 11 and denied it.

The court directed the clerk to terminate the summary-judgment motion. It separately referred the matter for settlement and ordered the parties to file a joint settlement-status update by June 1, 2024. If the case was not settled, the court stated that it would set a trial date and related deadlines for Hernandez’s claims.