Court: District Court, S.D. New York; July 28, 2016; Federal District Court
Lucero Santana has filed a lawsuit against Latino Express Restaurants, Inc. and Tommy Pimental, alleging violations of the Fair Labor Standards Act (FLSA) and New York State Labor Law (NYLL) concerning minimum and overtime wage payments. Additional claims include failure to provide written wage notices as required by the Wage Theft Prevention Act (WTPA) and discrimination and retaliation under the New York City Human Rights Law (NYCHRL). Santana seeks compensation for unpaid wages, liquidated damages, prejudgment interest, WTPA damages, emotional distress, punitive damages, and attorney fees.
The court, having jurisdiction under 28 U.S.C. §§ 1331 and 1367, reviewed Santana's unopposed motion for default judgment and grants it for liability on all claims, awarding damages related to wage and hour violations. The matter is referred to Magistrate Judge Debra C. Freeman for a damages inquest concerning the NYCHRL claims.
Santana worked as a server at the restaurant from April 3, 2015, to May 10, 2015, during which she was supervised by Pimental, who had control over employment terms. The restaurant grossed over $500,000 annually, and Santana was engaged in interstate commerce. She worked extensive hours without receiving any wages, only receiving a share of the tips. The restaurant did not inform her about tip credits, failed to provide necessary wage notifications, and lacked a system to record actual working hours.
Approximately one to two weeks after Santana began her employment at the Restaurant, Pimental frequently criticized her clothing and appearance, despite the absence of a dress code and her similar attire to co-workers. He insisted that she dress "sexier," made derogatory remarks about her clothing, and suggested he could help her acquire tighter jeans. Pimental also made inappropriate comments regarding his interest in younger women and questioned Santana about her relationship status, even after she expressed disinterest. Following Santana's complaint to Pimental’s wife, who co-owned the Restaurant, Pimental retaliated by reprimanding her, glaring at her during work, shouting at her publicly, and assigning her less desirable tasks, which had been evenly distributed prior to her complaint. Santana ultimately resigned on or about May 10, 2015, feeling humiliated and emotionally distressed from Pimental’s behavior. She filed a lawsuit on June 24, 2015, alleging violations of various labor laws and served both defendants in July 2015. The defendants did not respond, prompting the court to grant Santana permission to seek a default judgment. A Certificate of Default was issued, and subsequent court instructions indicated that Pimental must file a Notice of Appearance by April 22, 2016. As that deadline passed without compliance, the court resolved to decide on Santana's motion for default judgment.
To grant a motion for default judgment, courts in this district evaluate three factors: 1) the willfulness of the defendant’s default; 2) the existence of a meritorious defense by the defendant; and 3) the potential prejudice to the non-defaulting party if the motion is denied. The court finds these factors favor the plaintiff. Following this assessment, the court must ensure the plaintiff has sufficiently pleaded facts and provided evidence to establish the defendant’s liability for each claimed cause of action. A defendant's default implies an admission of the complaint's factual allegations but does not concede damages. Although an evidentiary hearing is not mandatory, the court must ascertain damages with reasonable certainty, often utilizing detailed affidavits and documentary evidence.
Regarding liability under the Fair Labor Standards Act (FLSA) and New York Labor Law, the FLSA applies to employees involved in interstate commerce or employed by an enterprise engaged in such commerce. The plaintiff claims that the restaurant's gross revenues met statutory thresholds and that the plaintiff engaged in interstate commerce activities, qualifying her as a covered employee. Under the FLSA, an "employer" is defined as any person acting in the interest of an employer concerning an employee. It is undisputed that Latino Express employed the plaintiff and had control over her wages. Additionally, because Pimental had authority over hiring, firing, and managing the plaintiff's work, he is deemed an employer under the FLSA, as supervisory roles and control over employment terms are indicative of employer status.
An employee under the Fair Labor Standards Act (FLSA) must prove improper compensation by presenting her employer's records. If these records are inaccurate or insufficient, the employee can meet her burden by providing credible evidence to establish the work's amount and extent through reasonable inference. The employer then must supply evidence of the actual work performed; failure to do so allows the court to award approximate damages to the employee. In this case, the Restaurant failed to maintain accurate records, and since the Plaintiff's recollections and estimates of hours worked remain unchallenged, her claims of unpaid minimum and overtime wages are accepted, establishing liability under the FLSA. Additionally, the employer did not fulfill the New York Labor Law (NYLL) requirement to keep proper records, and thus, bears the burden to prove the Plaintiff’s pay, which they did not do. The Plaintiff also claims violations of the Wage Theft Prevention Act (WTPA) due to the lack of notification regarding pay rates and other wage-related information. The Court finds that the Plaintiff has sufficiently demonstrated damages related to the FLSA and NYLL violations. She is entitled to unpaid minimum and overtime wages for her five weeks of work at the Restaurant, calculated based on a minimum wage of $8.75 per hour and an overtime rate of $13.125. Over her employment, she worked 200 regular hours and 110 overtime hours, resulting in a total owed of $3,193.75 in unpaid wages.
Plaintiff seeks liquidated damages under both the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). The Second Circuit has not definitively ruled on the ability to recover cumulative liquidated damages under both statutes, leading to a split among district courts. A majority of courts permit recovery under both, arguing that the statutes serve different purposes, while others deny it, asserting they compensate for the same harm. Recent NYLL amendments align its liquidated damages more closely with the FLSA, removing previous requirements for willfulness and increasing damages from 25% to 100% of owed wages. This alignment has contributed to a trend against cumulative liquidated damages. The court agrees with this trend, ruling that Plaintiff is not entitled to double recovery, awarding $3,193.75 in total liquidated damages for violations of both statutes. Additionally, the court notes a division regarding the awarding of prejudgment interest alongside liquidated damages. Historically, prejudgment interest is not awarded for FLSA violations, while it can be for NYLL claims; however, recent amendments challenge this distinction, with some courts opting not to grant prejudgment interest in cases involving both statutes.
Cumulative liquidated damages under both the New York Labor Law (NYLL) and the Fair Labor Standards Act (FLSA) are not permitted, which similarly restricts the awarding of prejudgment interest for overlapping claims already compensated by FLSA liquidated damages. However, courts within the same Circuit have granted prejudgment interest alongside NYLL liquidated damages. The Court supports this approach, affirming that plaintiffs may recover under the statute that yields the most relief, which in this instance is the NYLL, allowing both liquidated damages and prejudgment interest.
The NYLL provides for liquidated damages equal to 100% of the unpaid wages and allows for prejudgment interest at a statutory rate of 9% per annum. Prejudgment interest can be awarded from a reasonable accrual date, which the Court determines as April 22, 2015, for the plaintiff's employment period. Consequently, the plaintiff is awarded prejudgment interest on the principal of $3,193.75 from that date until judgment. Additionally, for violations of the Wage Theft Prevention Act (WTPA), the plaintiff is entitled to $50 for each of the 31 workdays of violation, totaling $1,550 in statutory damages, plus costs and reasonable attorney’s fees.
The plaintiff also claims unlawful gender discrimination and sexual harassment under the New York City Human Rights Law (NYCHRL). It is prohibited for an employer to discriminate based on gender in employment conditions. Case law has expanded the definition of gender discrimination to include sexual harassment. To establish a prima facie case of sexual harassment, a plaintiff must demonstrate: 1) membership in a protected group, 2) unwelcome sexual harassment, 3) that the harassment was gender-based, 4) that it affected employment conditions, and 5) that the employer was aware or should have been aware of the harassment without taking remedial action.
An employer must provide a legitimate, independent, and nondiscriminatory rationale for its actions, after which the employee must demonstrate that this rationale is merely a pretext for discrimination. To establish a hostile work environment due to sexual harassment, the behavior must be both objectively and subjectively offensive, meaning it must be perceived as hostile by a reasonable person and by the plaintiff. Conduct deemed as mere petty slights does not incur liability under the New York City Human Rights Law (NYCHRL). The determination of a hostile work environment is based on the totality of circumstances, with the NYCHRL being broadly remedial, focusing on any unequal treatment rather than the severity or frequency, which pertains to damages.
In this case, the plaintiff alleges that Pimental discriminated against her and created a hostile work environment based on gender. She experienced continuous criticism regarding her attire and unwelcome romantic advances, which she reasonably interpreted as sexual harassment. Pimental's behavior included directing her to dress in a more provocative manner and making unwelcome comments about their relationship, all while failing to enforce any dress code uniformly. Pimental's actions constituted more than insignificant inconveniences, leading to a hostile work environment. Furthermore, when the plaintiff reported Pimental's behavior to the restaurant's co-owner, no corrective action was taken, establishing a prima facie case of discrimination.
Additionally, the plaintiff claims retaliation for opposing discriminatory practices, leading to her constructive discharge. Under the relevant law, it is unlawful for an employer to discriminate against an employee for opposing prohibited practices, including gender discrimination. To prove retaliation, the plaintiff must show that she engaged in protected activity, was aware of this activity, suffered an adverse employment action, and that there is a causal link between the two.
An employee establishes a prima facie case of retaliation, shifting the burden to the employer to provide legitimate, nondiscriminatory reasons for their actions. If the employer satisfies this burden, the employee must demonstrate that these reasons are a pretext for retaliation. Informal complaints about discrimination qualify as protected activity under the NYCHRL. Constructive discharge occurs when an employer creates intolerable working conditions that compel a reasonable person to resign. In cases of alleged sex-based discrimination under the NYCHRL, an employee may show adverse action by proving constructive discharge, even without actual termination.
In the present case, the plaintiff detailed that Pimental retaliated against her for opposing his sexual harassment by significantly altering his treatment towards her after she complained to his wife. His actions included assigning her undesirable tasks and creating a hostile work environment through aggressive behavior. The court determined that these actions constituted adverse employment actions, and a reasonable employee would feel compelled to resign under such conditions, thus finding constructive discharge. A causal connection was established between the plaintiff's complaint and Pimental's subsequent adverse actions, supported by the close temporal proximity of two weeks between the complaint and the constructive discharge.
As a result, the court found the plaintiff had successfully established a prima facie case of retaliation, with the defendants failing to present a legitimate reason for Pimental's behavior. The court granted the plaintiff's motion for default judgment, awarding her $3,193.75 in unpaid wages, prejudgment interest, liquidated damages, WTPA damages, and reasonable attorney’s fees. The case was referred to Magistrate Judge Freeman for further assessment of claims for back pay and emotional distress damages under the NYCHRL.
Plaintiff's factual allegations in the Complaint are accepted as true due to Defendants' failure to respond, which constitutes a concession of liability. The non-appearance of the Defendants is viewed as willful conduct, as established in case law. The Court cannot assess whether Defendants could present a meritorious defense due to their absence, and finds that Plaintiff would be prejudiced if unable to seek appropriate compensation for her work. Plaintiff claims lost back pay of $8,750 for twenty-five weeks since her last employment, but this request is denied as it lacks a legal basis related to her claims under the Fair Labor Standards Act (FLSA), New York Labor Law (NYLL), and New York Wage Theft Prevention Act (WTPA). Hostile work environment sexual harassment is defined as employer conduct that disrupts work performance or creates an intimidating environment, supported by relevant case law. The Restaurant is held liable for the discriminatory and retaliatory actions of Pimental, who, as co-owner and manager, exercised supervisory responsibilities. Thus, both Defendants are liable for discrimination and retaliation claims under the New York City Human Rights Law (NYCHRL).
