Shu Qin Xu v. Wai Mei Ho

Citations: 111 F. Supp. 3d 274; 2015 U.S. Dist. LEXIS 77776; 2015 WL 3767185Docket: No. 13-CV-323 (WFK)(RML)

Court: District Court, E.D. New York; June 15, 2015; Federal District Court

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Plaintiff Shu Qin Xu filed a lawsuit against multiple defendants, including Wai Mei Ho and several trading companies, for unpaid minimum wage, overtime wages, and spread of hours pay during her employment as a saleswoman from December 2000 to July 2012. The claims are brought under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). Both parties have filed motions for summary judgment.

Plaintiff asserts that she worked 60-hour weeks with inadequate compensation, receiving between $300 and $400 weekly, and was not informed of her rights concerning wages. She claims that the defendants failed to post required labor law notices and did not provide wage statements or maintain accurate records of her hours and wages. The defendants counter that Xu was a manager, not a saleswoman, and dispute the claims about payment structure and record-keeping, asserting that she was responsible for maintaining records.

The procedural history indicates that Xu filed her complaint on January 18, 2013, and subsequently moved for summary judgment on July 11, 2014. Defendants filed a cross-motion for summary judgment, arguing that Xu's claims are time-barred.

The standard for summary judgment requires that the movant demonstrate no genuine dispute exists regarding material facts, supported by record evidence. The court's decision on the motions for summary judgment will determine the outcome of the case based on these claims and defenses.

Affidavits and declarations for summary judgment must be based on personal knowledge, present admissible facts, and demonstrate the affiant's or declarant's competency to testify. The court interprets facts favorably for the non-moving party and resolves ambiguities against the movant. The district court's role is to determine if a trial is necessary, not to weigh evidence. The moving party must demonstrate that the record does not allow a rational fact-finder to favor the non-moving party; if successful, the burden shifts to the non-moving party to present specific facts indicating genuine trial issues. A mere "scintilla of evidence" is insufficient; the non-moving party must substantiate each element of their case. Failure to prove any essential element renders other facts immaterial, and conclusory statements lacking specificity cannot defeat a motion for summary judgment.

Regarding the statute of limitations, the court first assesses if the plaintiff's claims are barred, as this would negate the need to evaluate the substantive claims. Claims under the FLSA accrue on the payday following the unpaid work period and are subject to a two-year statute of limitations, extending to three years for willful violations. Willfulness is determined by whether the employer knew or recklessly disregarded the legality of their actions, typically resolved by the trier of fact. Additionally, equitable tolling may allow a time-barred complaint to proceed if justified.

NYLL claims have a six-year statute of limitations without requiring proof of willfulness, unlike FLSA claims. Federal courts use the same equitable tolling standards for both statutes. Defendants argue Plaintiff's claims began in 2006, but this misinterprets FLSA accrual law, which states that a new claim arises with each payday following an unlawful pay period. Plaintiff's latest FLSA claim would have accrued after her last unlawful pay period, which was in 2010.

Defendants provided evidence, including W-2 forms, showing Plaintiff worked for FNT from 2006-2010 and later for her own company, Ginseng Dynasty, Inc., in 2011, and part-time for a Defendant in 2012. In 2012, Plaintiff worked only 36 hours total, earning approximately $27.77 per hour, above the 2012 New York minimum wage of $7.25. As she did not work over 40 hours per week, she was not entitled to overtime pay under FLSA or NYLL. Similarly, since she worked only five hours a week in 2012, she was ineligible for spread of hours pay under NYLL. Therefore, her claims could not have accrued in 2012. 

The evidence indicates that Plaintiff's latest pay period was in 2010, making claims accruing after January 18, 2010, potentially valid if Defendants were willful. Claims accruing before January 18, 2010, would be time-barred since they occurred more than three years before the Complaint was filed on January 18, 2013.

NYLL claims that arose before January 18, 2007, are barred by the six-year statute of limitations. The plaintiff argues for equitable tolling based on the defendants' failure to post required notices and provide statements of hours worked and wages, but this argument is deemed insufficient. The court denies the request for equitable tolling, noting that granting it for such violations would undermine the statute of limitations. 

Regarding the willfulness of the defendants' actions related to the plaintiff's 2010 FLSA claims, the court considers several factors. The plaintiff claims willfulness due to cash payments, attempts to conceal the corporate identity, failure to maintain records or train staff on FLSA requirements, and non-posting of mandatory notices. While the defendants do not dispute failing to pay overtime, they argue that the plaintiff has not proven their knowledge of FLSA obligations. However, the court finds evidence of willfulness in the defendants' admissions about cash payments and their failure to provide complete W-2s. 

Precedents are cited where similar discrepancies in payment methods and lack of notice posting led to findings of willfulness. The court concludes that the defendants' actions support a finding of willfulness, as they did not post required notices, made off-the-book cash payments, and failed to pay proper overtime.

Defendants' actions are deemed willful, allowing Plaintiff's 2010 FLSA claims to proceed as they are not time-barred. The motion for summary judgment regarding these claims is denied. However, summary judgment is granted for Defendants concerning Plaintiff's pre-2010 FLSA claims and pre-2007 NYLL claims, as they fall outside the respective statutes of limitations. 

Plaintiff alleges she received $300 to $400 per week for 60-hour workweeks, resulting in an hourly wage below the minimum wage applicable during that period. Defendants claim Plaintiff was paid between $1,800 and $2,200 monthly but do not contest her 60-hour workweek or the lack of overtime pay. W-2 forms submitted by Defendants indicate a payment of only $600 per month, contradicting their claims. 

The Defendants' defense hinges on undocumented cash payments to Plaintiff, leading to a material fact dispute regarding her actual compensation. Consequently, the Court denies Plaintiff's motion for summary judgment based on minimum wage claims. 

Regarding Plaintiff's classification as an exempt employee under FLSA and NYLL, the parties dispute her pay and whether her primary duty was management. The Court finds genuine disputes over her role and compensation, denying both parties' motions for summary judgment on overtime entitlement.

Disputes also exist concerning Plaintiff's claim for unpaid spread of hours pay, as the applicability of this pay correlates with minimum wage status. Therefore, summary judgment is denied for both parties on this claim as well.

In conclusion, Plaintiff's motion for summary judgment is granted only concerning willfulness for FLSA statute of limitations, while it is denied for other matters. Defendants' motion for summary judgment is granted for pre-2010 FLSA and pre-2007 NYLL claims but denied for all other claims.