Chen v. L & H Wine & Liquor, Inc.

Background

Jinxu Chen sued L & H Wine & Liquor, Inc., Longhua Lin, and Jianhao Ren under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL). Chen alleged that he worked as a clerk at the defendants’ Bronx liquor store from December 4, 2018, through June 18, 2019, but was not properly paid minimum wages, overtime, and spread-of-hours pay. He also alleged that the defendants failed to provide a required wage notice when he was hired and required wage statements with his pay.

The parties waived a jury trial, and the court held a bench trial. The court found that Chen worked approximately 66 hours per week, was paid $2,800 for his first month and generally $3,000 per month afterward, and was not paid one-and-a-half times his regular rate for hours over 40 per week. The court found that Lin’s time records were unreliable. It also found that Chen did not receive a written wage notice or wage statements. Lin fired Chen on June 18, 2019, and did not pay him for work performed from June 4 through June 18.

Claims Against Ren

The court ruled for Ren on all of Chen’s claims. Applying the FLSA’s economic-reality test for determining whether someone is an employer, the court found that Ren did not make decisions about Chen’s employment, supervise him, control his schedule, determine his compensation, or maintain his employment records. The court therefore entered judgment in Ren’s favor on all claims.

FLSA and NYLL Wage Claims

The court rejected Chen’s federal and state minimum-wage claims. Although Chen was paid for his work, the court calculated that his regular hourly rate exceeded both the federal and applicable New York minimum wages.

The court ruled for Chen on his federal and state overtime claims against L & H Wine & Liquor and Lin. Chen regularly worked more than 40 hours per week, and the defendants did not pay the required overtime rate. The court also rejected any argument that the monthly salary included overtime because employees cannot waive the FLSA’s overtime protections.

The court rejected Chen’s NYLL spread-of-hours claim. That claim provides an additional hour of minimum-wage pay when the interval between the beginning and end of a workday exceeds 10 hours. The court concluded that Chen was not paid at the minimum-wage level, so he was not entitled to this additional payment under the law as applied by the court.

The court ruled for Chen on his NYLL wage-notice and wage-statement claims. Lin did not provide the required notice when Chen was hired or the required statements with Chen’s wage payments.

Damages

The court calculated $20,422.02 in unpaid wages and overtime compensation under the NYLL. Because the NYLL award subsumed the federal award, the court did not provide a separate recovery for the same injury under both statutes.

The court also awarded $20,422.02 in liquidated damages, an additional amount equal to the unpaid wages and overtime compensation. The court found that L & H Wine & Liquor and Lin had no good-faith defense because Lin did not establish that he took adequate steps to comply with wage law, did not discuss overtime pay with Chen, and paid substantially less than the amount his accountant’s proposed calculation would have required.

For the wage-notice violation, the court awarded the statutory maximum of $5,000. For the wage-statement violation, it awarded another $5,000. Chen’s total damages award was $50,844.04.

Disposition and Remaining Issues

Judge Paul G. Gardephe found in favor of Ren on all claims and in favor of Chen against L & H Wine & Liquor and Lin on the unpaid-wage, overtime, wage-notice, and wage-statement claims identified in the conclusion. The court did not award spread-of-hours or minimum-wage damages. Chen and the remaining defendants were directed to address pre-judgment interest and attorneys’ fees and costs through later submissions under the deadlines stated in the opinion.