Summary
finding plaintiff "entitled to an award of prejudgment interest only on unpaid wages and spread of hours pay for which liquidated damages pursuant to the FLSA were not assessed"
Summary of this case from Galicia v. 63-68 Diner Corp.Opinion
11 Civ. 7777 (JGK) (JLC)
08-02-2012
MANUEL ANGAMARCA and LIVIO ANGAMARCA, individually and on behalf of others similarly situated, Plaintiffs, v. PITA GRILL 7 INC. d/b/a PITA GRILL EAST, 291 SEVENTH FOOD CORP. d/b/a PITA GRILL, PITAGRILLNYC CORP. d/b/a PITA GRILL, PITA GRILL MANAGEMENT CO., INC. d/b/a PITA GRILL, BENNETT ORFALY, AKBAR HOSSAIN, SHAHJAHAR MAHMUD, and WAYNE MURATORE, Defendants.
REPORT AND RECOMMENDATION
JAMES L. COTT, United States Magistrate Judge.
To the Honorable John G. Koeltl, United States District Judge:
On April 27, 2012, the Court granted Plaintiffs' motion for a default judgment in this wage-and-hour suit and referred the case to me to conduct an inquest into damages. For the reasons that follow, I recommend that the Court enter judgment against Defendants in the amount of $282,419.01 in damages, as apportioned below, along with pre-judgment interest, and $12,784.13 in attorneys' fees and costs.
I. Background
A. Established Facts as a Result of Defendants' Default
It is well-settled that in light of Defendants' default, the Court is required to accept all of Plaintiffs' allegations as true, except for those pertaining to damages. See, e.g., Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009) (citing Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981)); Cotton v. Slone, 4 F.3d 176, 181 (2d Cir. 1993), Accordingly, the following facts are established as a result of Defendants' default.
Pita Grill is the trade name of a chain of fast-food restaurants operating in and around New York City. (See Complaint dated Oct. 31, 2011 (the "Complaint" or "Compl.") ¶ 2 (Dkt. No. 1)). Defendant Pita Grill 7 Inc. is a corporation that maintains an office at 299 Broadway in Manhattan and operates a Pita Grill restaurant located at 1570 First Avenue, New York, New York 10028. (Compl. ¶ 23). Defendant 291 Seventh Food Corp. is a corporation that maintains an office at 299 Broadway in Manhattan and operates a Pita Grill restaurant located at 291 Seventh Avenue, New York, New York 10001. (Compl. ¶ 24). Defendant PitaGrillNYC Corp. is a corporation that maintains an office at 299 Broadway in Manhattan and operates a Pita Grill restaurant located at 1083 Second Avenue, New York, New York 10022. (Compl. ¶ 25). Defendant Pita Grill Management Co., Inc. is a corporation with an office at 299 Broadway in Manhattan that is involved with the operation of each of the Pita Grill restaurants. (Compl. ¶ 26). These corporate defendants, along with individual defendants, Bennett Orfaly, Akbar Hossain, Shahjahar Mahmud, and Wayne Muratore (the "Individual Defendants") (collectively, "Defendants"), own and manage the three Pita Grill restaurants whose operations are at issue in this case (collectively, the "Restaurants"). (Compl. ¶¶ 27-45).
At all relevant times, Manuel Angamarca ("Manuel") and Livio Angamarca ("Livio") (together, "Plaintiffs") were employees of the Restaurants as defined under the relevant provisions of the Fair Labor Standards Act ("FLSA"), 20 U.S.C. § 203(e), and New York Labor Law ("NYLL"), NYLL § 651(5). (Compl. ¶¶ 18-21). Manuel worked for Defendants from approximately May 1, 2007 to August 21, 2011. (Compl. ¶ 48; see also Affidavit of Manuel Angamarca dated Apr. 4, 2012 ("Manuel's Affidavit" or "Manuel Aff.") ¶ 6 (Dkt. No. 29); Affirmation of Michael A. Faillace, Esq. in Support of Plaintiffs' Motion for Default dated Apr. 4, 2012 ("Faillace Affirmation" or "Faillace Aff.") (Dkt. No. 31), Ex. S (Dkt. No. 31-19)). Livio worked for Defendants from approximately July 1, 2008 to November 1, 2010, and again from May 1, 2011 to August 20, 2011. (Compl. ¶ 67; see also Faillace Aff., Ex. S). Plaintiffs were employed as deliverymen but performed a number of other tasks at the Restaurants, including certain food preparation, dishwashing, inventory management, and cleaning, which collectively accounted for a significant portion of their work hours each workday. (Compl. ¶¶ 6, 10, 12, 50-52, 69-70, 88).
Although one paragraph of the Complaint states that Livio's first period of employment began in July 2010 (Compl. ¶ 21), a more detailed recitation of Livio's employment in the Complaint and Livio's own affidavit allege that his employment began in July 2008. (Compl. ¶ 67; Affidavit of Livio Angamarca dated Apr. 4, 2012 ("Livio's Affidavit" or "Livio Aff.") ¶ 10 (Dkt. No. 30)). The Court credits the earlier date because Livio's affidavit is submitted under oath and it, like the latter paragraph in the Complaint, provides the more detailed chronology of his employment. See, e.g., Almeida v. Aguinaga, 500 F. Supp. 2d 366, 367 n.2 (S.D.N.Y. 2007) (crediting employee's sworn affidavit instead of unsworn memorandum that differed on employment dates).
Defendants were Plaintiffs' employers within the meaning of the FLSA and NYLL, with power to hire and fire Plaintiffs, control the terms and conditions of their employment, and determine the rate and method of their compensation. (Compl. ¶ 43). Defendants required Plaintiffs to work six days per week and more than forty hours per week but did not pay the minimum wage or provide overtime compensation. (Compl. ¶¶ 15, 56-57, 74-75, 85). Defendants also failed to pay Plaintiffs additional "spread of hours" compensation for days in which they worked more than 10 hours, as required by NYLL. (Compl. ¶ 9). Defendants did not maintain signs in the Restaurants displaying information on employees' rights to minimum wage and overtime pay, the prohibition against illegal deductions from wages, and the policy on employee tips. (Compl. ¶¶ 65, 83, 93). Additionally, Defendants employed and accounted for Plaintiffs as tipped deliverymen in order to pay Plaintiffs an hourly wage that was lower than the minimum wage because it included a deduction for a "tip credit." (Compl. ¶¶ 11, 13). Plaintiffs' responsibilities, however, exceeded making deliveries and they received no explanation of the tip credit. (Compl. ¶¶ 10, 12-13, 62, 80). Defendants also required Plaintiffs to obtain bicycles and clothing bearing the Pita Grill logo at their own expense. (Compl. ¶¶ 66, 84). These circumstances prompted Plaintiffs to commence this action.
Although Plaintiffs allege that they were required to purchase bicycles and uniforms in their Complaint, they do not seek reimbursement for such costs in their submissions in support of a default judgment. Indeed, there is no reference to either uniforms or bicycles in their memorandum of law, nor are the costs of these items included in the chart that otherwise outlines amounts for which they seek compensation. (Faillace Aff. ¶ 30 & Ex. S). Therefore, the Court should deem any claim for reimbursement of these costs waived.
B. Procedural History
Plaintiffs filed the Complaint on November 1, 2011. (See Dkt. No. 1). Defendants failed to answer. (See Order dated Apr. 27, 2012 ("Order Granting Def. J.") (Dkt. No. 34)). The Court scheduled a Rule 16 conference for January 10, 2012. (See Notice of Court Conference dated Nov. 16, 2011 (Dkt. No. 2)). On January 9 and February 15, 2012, the Court granted Plaintiffs' requests to adjourn the conference to allow more time to perfect service on the Individual Defendants. (See Endorsed Letter dated Jan. 9, 2012 (Dkt. No. 7); Endorsed Letter dated Feb. 13, 2012 (Dkt. No. 8)). On March 16, 2012, the Court again adjourned the conference. (See Order dated Mar. 16, 2012 (Dkt. No. 9)). On April 2, 2012, Plaintiffs filed affidavits of service on the Individual Defendants (Affidavits of Service (Dkt. Nos. 10-13)), and the Clerk of the Court certified that Defendants failed to respond to the Complaint and were in default. (Clerk's Certificates of Default (Dkt. Nos. 14-21)). Accordingly, the Court ordered Defendants to show cause by April 17, 2012 as to why a default judgment should not be entered against them. (See Order to Show Cause dated Apr. 5, 2012 (Dkt. No. 22)). In support of a default judgment, Plaintiffs submitted a memorandum of law (Dkt No. 28) and the affidavits of Manuel and Livio (Dkt. Nos. 29-30), as well as an attorney affirmation, setting forth Plaintiffs' basis for seeking damages. On April 27, 2012, the Court granted the application for default judgment, and referred the case to me for an inquest into damages. (Order Granting Def. J. at 1; Dkt. No. 33).
On May 1, 2012, I issued a Scheduling Order requiring Defendants to submit their opposition papers by May 31, 2012. (See Scheduling Order for Damages Inquest (Dkt. No. 36)). Defendants failed to submit any papers to the Court.
II. Discussion
A. Applicable Burden of Proof
As the district court has entered a default judgment in this case, the remaining issue is the amount of damages to which Plaintiffs are entitled. Plaintiffs bear the burden of establishing their entitlement to recovery and thus must substantiate their claims with evidence to prove the extent of their damages. See Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992) (citing Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974)).
Although the Court may hold a hearing to assess damages, a hearing is not required where a sufficient basis on which to make a calculation exists. See Fed. R. Civ. P. 55(b)(2); see also Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989). Indeed, the Second Circuit has long approved the holding of an inquest by affidavit, without an in-person court hearing, "as long as [the Court has] ensured that there was a basis for the damages specified in the default judgment." Transatl. Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (quoting Fustok, 873 F.2d at 40). "Magistrate judges and district courts have interpreted this to mean that, even when the defendant defaults and is not present to object, damages must be based on admissible evidence." House v. Kent Worldwide Mach. Works, Inc., 359 F. App'x 206, 207 (2d Cir. 2010) (citations omitted). Accordingly, I will rely on Plaintiffs' affidavits to determine whether the requested damages are reasonable. See, e.g., Maldonado v. La Nueva Rampa, Inc., No. 10 Civ. 8195 (LLS) (JLC), 2012 WL 1669341, at *3 (S.D.N.Y. May 14, 2012) (report and recommendation) (citing Tamarin v. Adam Caterers, Inc., 13 F.3d 51, 54 (2d Cir. 1993)).
An employee seeking to recover unpaid wages "has the burden of proving that he performed work for which he was not properly compensated." Jiao v. Chen, No. 03 Civ. 165 (DF), 2007 WL 4944767, at *2 (S.D.N.Y. Mar. 30, 2007) (quoting Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946)). An employer is required to maintain "records of the persons employed by him and of the wages, hours, and other conditions and practices of employment maintained by him." 29 U.S.C. § 211(c); see also 12 N.Y. Comp. Codes R. & Regs. ("NYCRR") § 142-2.6. However, absent such documentation, an employee may establish his right "by relying on his recollection alone." Yang v. ACBL Corp., 427 F. Supp. 2d 327, 335 (S.D.N.Y. 2005). "[T]he employee should not speculate, but he may rely solely on his or her recollection" to carry the burden. Park v. Seoul Broad. Sys. Co., No. 05 Civ. 8956 (BSJ) (DFE), 2008 WL 619034, at *7 (S.D.N.Y. Mar. 6, 2008) (citing Yang, 427 F. Supp. 2d at 335). An affidavit that sets forth the number of hours worked is sufficient. Rodriguez v. Queens Convenience Deli Corp., No. 09 Civ. 1089 (KAM) (SMG), 2011 WL 4962397, at *2 (E.D.N.Y. Oct. 18, 2011).
Once an employee has presented his or her evidence, an employer may then "come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee's evidence." Lanzetta v. Florio's Enters., Inc., 763 F. Supp. 2d 615, 618 (S.D.N.Y. 2011) (quoting Mt. Clemens Pottery Co., 328 U.S. at 688). "If the employer fails to do so, the court may enter judgment in the employee's favor, using her recollection to determine damages, 'even though the result be only approximate.'" Id. (quoting Reich v. S. New England Telecomms. Corp., 121 F.3d 58, 67 (2d Cir. 1997)). Because Defendants have defaulted, Plaintiffs' representations as to the dates they worked will be credited and their damages calculated on that basis.
B. Statute of Limitations
1. Statutory Periods for Recovery under NYLL and the FLSA
Plaintiffs bring their claims pursuant to NYLL and the FLSA. The statute of limitations is six years under NYLL and two years under the FLSA. See NYLL § 663(3); 29 U.S.C. § 255(a). However, if an employer's acts are found to be "willful," the statute of limitations under the FLSA increases to three years. 29 U.S.C. § 255(a). The Complaint alleges the acts of Defendants were willful (Compl. ¶¶ 94, 98, 105, 109), a fact the Court accepts as true given Defendants' default. See, e.g., Maldonado, 2012 WL 1669341, at *3; Wicaksono v. XYZ 48 Corp., No. 10 Civ. 3635 (LAK) (JCF), 2011 WL 2022644, at *3 (S.D.N.Y. May 2, 2011), report & rec. adopted, 2011 WL 2038973 (S.D.N.Y. May 24, 2011) (because defendant defaulted and complaint alleged willfulness, plaintiffs were entitled to willfulness finding and FLSA three-year statute of limitations applied). Therefore, the limitations period for each of the federal claims asserted is three years. See Rodriguez, 2011 WL 4962397, at *2. "The statute of limitations starts to run when the employee begins to work for the employer." Id. (citation omitted).
2. Impact of Longer Statutory Period under NYLL
Plaintiffs may not recover under both NYLL and the FLSA for the same injury. See, e.g., Maldonado, 2012 WL 1669341, at *5; Cao v. Wu Liang Ye Lexington Rest., Inc., No. 08 Civ. 3725 (DC), 2010 WL 4159391, at *2 n.2 (S.D.N.Y. Sept. 30, 2010). Therefore, Plaintiffs will recover under the statute that provides for the greatest relief. See Wicaksono, 2011 WL 2022644, at *3; Jiao, 2007 WL 4944767, at *17. As the Complaint was filed on November 1, 2011, November 1, 2008 is the earliest date for which Plaintiffs may recover under the FLSA. See, e.g., Maldonado, 2012 WL 1669341, at *5 n.3. Accordingly, Manuel cannot seek recovery for lost wages under the FLSA for his employment between May 1, 2007 and November 1, 2008, although he may under NYLL. In addition to providing a longer recovery period, at all relevant times during his tenure, NYLL sets a minimum wage that is the same or greater than that provided by the FLSA. Therefore, the Court will calculate compensatory damages under NYLL for Manuel as of May 1, 2007.
Compare NYLL § 652 (requiring employers to pay $7.15 per hour as of January 1, 2007 and $7.25 per hour as of July 24, 2009) with 29 U.S.C. § 206(a)(1) (setting federal minimum wage at: $5.15 from September 1, 1997 to July 23, 2007, $5.85 as of July 24, 2007, $6.55 as of July 24, 2008, and $7.25 as of July 24, 2009).
Like Manuel, Livio cannot recover for wages earned prior to November 1, 2008 under the FLSA, but he may do so under NYLL. Consequently, the wages to which he was entitled from July 1, 2008 through November 1, 2008 will be calculated under NYLL. At all other relevant times during Livio's tenure, NYLL allowed for greater or equal recovery compared to the FLSA. Therefore, the Court will also calculate compensatory damages for Livio under NYLL. Accordingly, NYLL is the governing statute for all calculations, unless otherwise noted.
In particular, the Court calculates liquidated damages under the FLSA. See infra at 15.
C. Unpaid Wages, Overtime Wages, and Spread of Hours Compensation
1. Legal Standards for Entitlement
State and federal law require employers to pay at least a minimum hourly rate to employees for every hour they work ("minimum wage"). See 29 U.S.C. § 206(a); 12 NYCRR § 146-1.2. When both Plaintiffs began working, the New York State minimum hourly wage was $7.15. NYLL § 652. The minimum wage was increased to $7.25 per hour as of July 24, 2009. Id.; see also 12 NYCRR § 146-1.2. Throughout their employment, Plaintiffs earned less than the applicable minimum wage and are therefore entitled to reimbursements in the amounts outlined below.
Moreover, an employee who is paid partially through tips may be paid at a rate less than the minimum wage, meaning the minimum wage minus the "tip credit," so long as the employer "(1) inform[s] the employee of the 'tip credit' provision of the FLSA, and (2) permit[s] the employee to retain all of the tips the employee receives." Copantitla v. Fiskardo Estiatorio, Inc., 788 F. Supp. 2d 253, 287 (S.D.N.Y. 2011) (quotation omitted) (discussing 29 U.S.C. § 203(m) (federal statute on "tip credit")); see also 12 NYCRR § 146-2.2 (state tip credit effective Jan. 1, 2011); 12 NYCRR § 137-2.2 (state tip credit effective through Dec. 31, 2010). Here, Defendants did not give notice to Plaintiffs that their tips would be included as an offset against the minimum wage. (Compl. ¶¶ 62, 80). Defendants have therefore failed to satisfy their burden of proving that they informed the employees of the tip credit law, a requirement that is "strictly construed." Wicaksono, 2011 WL 2022644, at *4 (citation omitted); see, e.g., Cao, 2010 WL 4159391, at *2 (defendant employer not eligible for "tip credit" absent notice, even for delivery workers who received a significant portion of income from tips); Ke v. Saigon Grill, Inc., 595 F. Supp. 2d 240, 254 (S.D.N.Y. 2008) (defendant employer that failed to give notice to delivery workers not eligible for tip credit).
Effective January 1, 2011, 12 NYCRR § 146-2.9 prohibits an employer from taking a tip credit if an employee "works at a non-tipped occupation (a) for two hours or more, or (b) for more than twenty percent (20%) of his or her shift, whichever is less." See Gillian v. Starjem Rest. Corp., No. 10 Civ. 6056 (JSR), 2011 WL 4639842, at *6 n.8 (S.D.N.Y. Oct. 4, 2011) (fact question as to whether certain restaurant employees worked in excess of two hours or 20% of day in non-tipped positions in violation of 12 NYCRR § 146-2.9 precluded summary judgment). Here, Plaintiffs spent at least half of their workdays performing non-delivery tasks despite Defendants' designation of them as tipped delivery workers. (Compl. ¶¶ 10-13, 52, 70). Therefore, Defendants were prohibited from taking a tip credit as of January 2011 under this provision as well.
In addition to setting a mandatory minimum wage, federal and state law also require that employers pay one and one-half times the ordinary minimum wage for any time greater than 40 hours that they work in a given week ("the overtime rate"). 29 U.S.C. § 207(a); 12 NYCRR § 146-1.4; see also Kolesnikow v. Hudson Valley Hosp. Ctr., 622 F. Supp. 2d 98, 118 (S.D.N.Y. 2009). If an employee demonstrates that he has worked more than 40 hours per week, he is entitled to recover the overtime rate for any hours in excess of 40. Here, Plaintiffs were not compensated at the overtime rate for hours they worked in excess of 40 per week and are therefore entitled to reimbursement as outlined below. (Compl. ¶¶ 7, 15; see also Compl. ¶¶ 59-61, 77-79).
Finally, under New York law, employees are also entitled to receive "spread of hours" compensation, equaling "an extra hour's pay at the regular minimum wage for each day they work more than ten hours." Shahriar v. Smith & Wollensky Rest. Grp., Inc., 659 F.3d 234, 241-42 & n.4 (2d Cir. 2011) (citing 12 NYCRR § 137-1.7 and its replacement as of December 29, 2010, 12 NYCRR § 146-1.6, which both "require[] employers to pay employees an extra hour's pay at the minimum wage when their workday lasts longer than 10 hours"); see also Flores v. Anjost Corp., No. 11 Civ. 1531 (CM), 2012 WL 2339267, at *3 (S.D.N.Y. June 19, 2012) (noting that 12 NYCRR § 146-1.6(d) requires that all employees of hospitality industry, which includes restaurants and all-year hotels, receive spread of hours compensation regardless of given employee's regular rate of pay[,]" in contrast to 12 NYCRR § 142-2.4, which applies to miscellaneous industries and occupations, and which "'does not ensure additional compensation to employees whose wages sufficiently exceed'" minimum wage) (quotation omitted). "The additional hour of pay is not a payment for time worked or work performed and need not be included in the regular rate for the purpose of calculating overtime pay." 12 NYCRR § 146-1.6(c). As outlined below, because Defendants failed to pay Plaintiffs any spread of hours compensation, Plaintiffs are entitled to reimbursement for the days they worked in excess of ten hours.
The damages owed for a spread of hours claim are calculated by multiplying the number of days the employee worked more than 10 hours (either two or six days per week here) by the applicable minimum wage rate. See 12 NYCRR § 146-1.6.
2. Manuel's Wages
Manuel worked from May 1, 2007 to August 21, 2011. (Manuel Aff. ¶ 6; see also Faillace Aff., Ex. S). He worked 84 hours per week and was paid $4.60 per hour from May 1, 2007 through November 30, 2010, and $5.00 per hour from December 1, 2010 through August 21, 2011. (Manuel Aff. ¶¶ 10-11, 13-14). These amounts are well below the minimum wage. Accordingly, Manuel is owed unpaid wages, calculated as the difference between his working rate of either $4.60 or $5.00 per hour and the minimum wage at the relevant time for the 40 hours per week of regular (non-overtime) pay under NYLL. As noted above, the Restaurants are not entitled to a tip credit (Compl. ¶¶ 12, 62, 80), so Manuel is entitled to the entirety of the applicable minimum wage at all relevant times.
Manuel's Affidavit and Livio's Affidavit each contain two sets of paragraphs numbered 10 through 12. (Manuel Aff. at 2-3; Livio Aff. at 2-3). The Court refers to each paragraph as it has been marked, albeit incorrectly, because the referenced paragraph is easily identifiable from the contents contained within it.
Manuel worked 116 weeks making $4.60 per hour when the NYLL statutory minimum wage was $7.15, and was therefore deprived of $102 per week during this period. He also worked 108 weeks making either $4.60 or $5.00 per hour when the minimum wage was $7.25, and was therefore deprived of $106 per week for the 70 weeks from July 24, 2009 to November 30, 2010 when he was paid $4.60 per hour, and $90 per week for the 38 weeks from December 1, 2010 to August 21, 2011 when he was paid $5.00 per hour. Manuel is therefore owed $22,672 in unpaid regular wages.
Manuel worked a total of 116 weeks, from May 1, 2007 to July 23, 2009, when the minimum wage was $7.15 per hour. To determine weekly unpaid wages, the Court multiplies the number of non-overtime hours worked (40) by the difference between the operative minimum wage (e.g., $7.15) and Manuel's actual wage rate per hour ($4.60 until November 30, 2010 and $5.00 thereafter). Therefore, Manuel lost $102 per week during the period when he was paid $4.60 per hour and the minimum wage was $7.15: (40 (hours) * $2.55 (difference between his actual wage rate, $4.60, and the minimum wage rate, $7.15)). See, e.g., Wicaksono, 2011 WL 2022644, at *3-4.
Manuel earned an actual wage rate of $4.60 per hour for 70 weeks (from July 24, 2009 to November 30, 2010) when the minimum wage was $7.25. Therefore, Manuel lost $106 per week (40 hours * $2.65 (difference between $4.60 and $7.25)). Manuel earned an actual wage rate of $5.00 per hour for 38 weeks when the minimum wage was $7.25. Therefore, Manuel lost $90 per week (40 hours * $2.25 (difference between $5.00 and $7.25)).
Manuel's unpaid regular wages are calculated as follows: ((40 hours * 116 weeks * $2.55 (difference between his actual wage of $4.60 and the minimum wage rate of $7.15)) = $11,832) + ((40 hours * 70 weeks * $2.65 (difference between $4.60, his actual wage, and $7.25, the minimum wage rate)) = $7,420) + ((40 hours * 38 weeks * $2.25 (difference between $5.00, his actual wage, and $7.25, the minimum wage rate)) = $3,420) = $22,672.
Manuel was also deprived of overtime payments. Manuel worked 44 hours per week of overtime and was paid his ordinary wage rate of $4.60 or $5.00 for these hours. (Manuel Aff. ¶¶ 11-16). To calculate the amount of overtime wages owed, the Court multiplies the amount of hours worked above 40 hours—here 44 hours (Manuel Aff. ¶¶ 10-11)—by the difference between the applicable overtime rate and the actual rate. For example, when the overtime rate was $10.73 per hour, one multiplies 44 hours by $6.13, which equals $269.72 of unpaid overtime wages per week. Applying this formula to the entirety of Manuel's employment and considering the applicable wage rates, Manuel is owed $60,461.28 in overtime wages.
The overtime rate is one and one-half times the minimum wage rate, so, for example, the overtime rate is $10.73 when the minimum wage is $7.15 and $10.88 when the minimum wage is $7.25. See 12 NYCRR § 146-1.4.
Manuel's unpaid overtime wages were calculated as follows: ((44 hours * 116 weeks * $6.13 (difference between his actual wage of $4.60 and the overtime rate of $10.73)) = $31,287.52) + ((44 hours * 70 weeks * $6.28 (difference between $4.60, his actual wage, and $10.88, the overtime rate)) = $19,342.40) + ((44 hours * 38 weeks * $5.88 (difference between $5.00, his actual wage, and the overtime rate, $10.88)) = $9,831.36) = $60,461.28.
Finally, Manuel is entitled to spread of hours compensation—equaling an additional hour of minimum wage pay for every day worked longer than ten hours—because he worked 14-hour days throughout his employment. (Manuel Aff. ¶¶ 10-11, 17). Spread of hours compensation is calculated by multiplying the minimum wage by the number of days an employee worked more than ten hours. For example, when the minimum wage was $7.15, the Court multiplies $7.15 by the six days per week that Manuel worked more than ten hours (Manuel Aff. ¶ 11), which equals $42.90 of unpaid spread of hours compensation per week. Manuel is thus entitled to $9,674.40 in spread of hours compensation. In sum, Manuel's total compensation for unpaid regular wages, overtime wages, and spread of hours is $92,807.68.
Manuel's spread of hours calculation is as follows: (6 (days per week worked 10 hours or more) * $7.15 (minimum wage rate) * 116 (weeks worked at that rate)) + (6 days per week * $7.25 * 108 weeks) = $9,674.40.
An alternative method for computing unpaid regular wages, overtime wages, and spread of hours compensation is to calculate the total amount of unpaid compensation per week in a lump sum. For example, if Manuel had been paid in accordance with NYLL for a week in which he worked 84 hours over six days when the minimum wage was $7.15 per hour, he should have received the following per week: ($7.15 (minimum wage rate) * 40 (hours of regular pay) = 286) + ($10.73 (overtime wage rate) * 44 (hours of overtime worked) = $472.12) + (6 (days worked over 10 hours) * $7.15 (minimum wage rate) = 42.90) = $801.02. One then subtracts the $386.40 he did receive ($4.60 actual wage rate * 84 hours) from $801.02, which equals $414.62 in unpaid compensation per week. There is no difference between the amount calculated using this alternate method and the amount calculated by the Court as follows: $102 (unpaid regular wages) + $269.72 (unpaid overtime wages) + $42.90 (spread of hours compensation) = $414.62 in unpaid wages and spread of hours compensation per week.
3. Livio's Wages
Livio is similarly entitled to unpaid wages, overtime wages, and spread of hours compensation. Livio worked from July 1, 2008 to November 1, 2010, and again from May 1, 2011 to August 20, 2011. (Livio Aff. ¶ 6; see also Faillace Aff., Ex. S). Like Manuel, Livio was paid $4.60 per hour from July 1, 2008 to November 1, 2010 while working 84 hours per week, and was paid $5.00 per hour from May 1, 2011 to August 20, 2011 while working 50 hours per week. (Livio Aff. ¶¶ 10-11, 13-16). Applying the same formulas used to calculate the wages to which Manuel is entitled, Livio is owed $14,152 in unpaid regular wages, $34,288.84 in overtime wages, and $5,506 in spread of hours compensation for a total of $53,946.84.
From July 1, 2008 to November 1, 2010, Livio worked 84 hours per week, evenly spread over six days. (Livio Aff. ¶ 10). From May 1, 2011 to August 20, 2011, Livio worked 50 hours per week, but only two of those workdays lasted longer than 10 hours to warrant spread of hours compensation. (Livio Aff. ¶ 11); see 12 NYCRR § 146-1.6(a).
The figures for Livio were calculated as follows: (1) regular wages (40 hours * 55 weeks * $2.55 (difference between $4.60, his actual wage, and $7.15, the minimum wage rate)) + (40 hours * 67 weeks * $2.65 (difference between $4.60, his actual wage, and $7.25, the minimum wage rate)) + (40 hours * 16 weeks * $2.25 (difference between $5.00, his actual wage, and $7.25, the minimum wage rate)) = $14,152; (2) overtime wages (44 hours of overtime worked * 55 weeks * $6.13 (difference between $4.60, his actual wage, and $10.73, the overtime rate)) + (44 hours * 67 weeks * $6.28 (difference between $4.60, his actual wage, and $10.88, the overtime rate)) + (10 hours * 16 weeks * $5.88 (difference between $5.00, his actual wage, and $10.88, the overtime rate)) = $34,288.84; (3) spread of hours compensation (6 (days per week worked 10 hours or more) * $7.15 (minimum wage rate) * 55 (weeks worked at that rate)) + (6 days * $7.25 * 67 weeks) + (2 days * $7.25 * 16 weeks) = $5,506.
D. Liquidated Damages
1. Liquidated Damages under the Fair Labor Standards Act
In addition to compensatory damages, Plaintiffs are entitled to liquidated damages under the FLSA because they have established that Defendants failed to pay the proper minimum wage and overtime rate. Under the FLSA, an employer "shall be liable" to employees for both unpaid minimum wages and unpaid overtime in "an additional equal amount as liquidated damages." 29 U.S.C. § 216(b). "The statute provides for liquidated damages in order to compensate employees for the often obscure and hard-to-prove consequences of having been wrongfully denied pay, rather than to punish employers." Jiao, 2007 WL 4944767, at * 16 (citing Reich, 121 F.3d at 71).
"While an award of liquidated damages is the norm, the FLSA provides that a court, in its discretion, may deny liquidated damages if the employer shows to the satisfaction of the court that the act or omission giving rise to such action was in good faith. It is the employer's burden to establish such good faith by plain and substantial evidence. Where, as here, a defendant employer has defaulted, the court plainly cannot find that it has made the showing of good faith necessary to defeat an award of liquidated damages." Solis v. Tally Young Cosmetics, LLC, No. 09 Civ. 4804 (SJ) (JO), 2011 WL 1240341, at *14 n.15 (E.D.N.Y. Mar. 4, 2011) (internal quotation marks and citations omitted).
Liquidated damages awards under the FLSA are equal to the amount owed in federal unpaid and overtime wages. See Rodriguez, 2011 WL 4962397, at *4. Although Manuel and Livio are not receiving a separate award of back wages under the FLSA—because it would duplicate the award received under NYLL, as described above—they are still entitled to an award of federal liquidated damages based on underpayment as recognized by the FLSA. See, e.g., Maldonado, 2012 WL 1669341, at *9; Wicaksono, 2011 WL 2022644, at *7; Rodriguez, 2011 WL 4962397, at *4; Saigon Grill, 595 F. Supp. 2d at 262 n.44. To calculate federal liquidated damages in a case like this one, where NYLL provided the greatest relief for compensatory damages, the Court calculates "the amount of actual damages that would have been awarded had the federal minimum wage rate applied." Wicaksono, 2011 WL 2022644, at *7; see, e.g., Maldonado, 2012 WL 1669341, at *9. Plaintiffs are entitled to federal liquidated damages for the time they worked during the three-year period prior to the filing of the Complaint, because Defendants' acts were willful. 29 U.S.C. § 255(a). In particular, Manuel is entitled to $51,722.32 and Livio is entitled to $39,704.80 in liquidated damages under the FLSA.
As noted above, Manuel's federal liquidated damages request for wages earned prior to November 1, 2008 is time-barred by the FLSA's three-year limitation period. Considering his wages for all later periods of employment, his award under the FLSA is calculated by multiplying the number of hours worked per week by the number of weeks worked by the difference between his actual wage rate and the federal minimum wage rate. Manuel always worked 40 hours per week at regular pay and 44 hours per week at time and a half. The calculation for the award is made as follows: (40 (regular hours) * 38 (weeks) * ($6.55 - $4.60 = $1.95) (difference between minimum wage and his actual rate)) + (40 hours * 70 weeks * ($7.25 - $4.60 = $2.65)) + (40 hours * 38 weeks * ($7.25 - $5.00 = $2.25)) + (44 (overtime hours) * 38 (weeks) * ($9.83 - $4.60 = $5.23) (overtime rate minus actual rate)) + (44 hours * 70 weeks * ($10.88 - $4.60 = $6.28)) + (44 hours * 38 weeks * ($10.88 - $5.00 = $5.88)) = $51,722.32.
Likewise, as noted above, Livio's federal liquidated damages request for any wages earned prior to November 1, 2008 is time-barred by the FLSA's three-year limitation period. His award under the FLSA for all later periods of employment is calculated by multiplying the number of hours worked per week by the number of weeks worked by the difference between his actual wage rate and the federal minimum wage rate. From November 2008 to November 2010, he worked 40 hours per week at regular pay and 44 hours per week at time and a half, and from May 2011 to August 2011, he worked 40 hours per week at regular pay and 10 hours per week at time and a half. The calculation for the award is made as follows: (40 (regular hours) * 38 (weeks) * ($6.55 - $4.60 = $1.95) (difference between minimum wage and his actual rate)) + (40 hours * 67 weeks * ($7.25 - $4.60 = $2.65)) + (40 hours * 16 weeks * ($7.25 - $5.00 = $2.25)) + (44 (overtime hours) * 38 (weeks) * ($9.83 - $4.60 = $5.23) (overtime rate minus actual rate)) + (44 hours * 67 weeks * ($10.88 - $4.60 = $6.28)) + (10 hours * 16 weeks * ($10.88 - $5.00 = $5.88)) = $39,704.80.
2. Liquidated Damages under New York Labor Law
Plaintiffs also seek liquidated damages under NYLL. (Memorandum of Law in Support of Plaintiffs' Application for Default Judgment dated Apr. 4, 2012 (the "Plaintiffs' Memorandum" or "Pls.' Mem.") at 13 (Dkt. No. 28); see also Compl. Prayer for Relief ¶¶ g, n; Faillace Aff. ¶ 30(d)). NYLL entitles them to liquidated damages if Defendants' wage violation was "willful." NYLL §§ 198(1-a), 663(1). As Defendants have defaulted, the Court accepts as true Plaintiffs' allegation that Defendants' conduct was "willful." (See supra page 7). The current version of NYLL § 663(1) states that an employee is entitled to "liquidated damages equal to one hundred percent of the total such underpayments found to be due." The statute was amended, effective April 9, 2011, to raise the amount of liquidated damages from 25% to 100% of unpaid wages. See 2010 N.Y. Sess. Laws, ch. 564 (S. 8380) (McKinney).
As Plaintiffs' Memorandum of law is unpaginated, the Court cites to the page numbers as they appear in the document header created by the electronic docketing system.
As the court noted in Wicaksono, "[a]uthority is mixed regarding whether a plaintiff may recover liquidated damages under both federal and state law." Wicaksono, 2011 WL 2022644, at *7. The majority of cases allow for "simultaneous recovery," because recovery of liquidated damages under federal and state law serve different functions. Gurung v. Malhotra, No. 10 Civ. 5086 (VM) (FM), 2012 WL 691532, at *7 (S.D.N.Y. Feb. 22, 2012) (collecting cases), report & rec. adopted, 2012 WL 983520 (S.D.N.Y. Mar. 13, 2012); see, e.g., Lanzetta v. Florio's Enters., Inc., No. 08 Civ. 6181 (DC), 2011 WL 3209521, at *5 (S.D.N.Y. July 27, 2011) (awarding plaintiff liquidated damages under both FLSA and NYLL because they serve different purposes); Cao, 2010 WL 4159391, at *5; Dong v. CCW Fashion Inc., Nos. 06 Civ. 4973, 07 Civ. 9741 (LAP) (DFE), 2009 WL 884680, at *4 (S.D.N.Y. Feb. 19, 2009); Saigon Grill, 595 F. Supp. 2d at 261-62. But see, e.g., Fu v. Pop Art Int'l Inc., No. 10 Civ. 8562 (DLC) (AJP), 2011 WL 4552436, at *5 (S.D.N.Y. Sept. 19, 2011). report & rec. adopted, 2011 WL 6092309 (S.D.N.Y. Dec. 7, 2011). In particular, New York liquidated damages have been deemed to constitute a penalty, as opposed to federal liquidated damages, which are seen as compensatory. Gurung, 2012 WL 691532, at *7. In any event, "by opting not to participate in this suit, [Defendants] have waived any claim" that Plaintiffs may not recover liquidated damages under both federal and state law. Id. at *8. Additionally, Plaintiffs are entitled to liquidated damages under NYLL for Defendants' failure to pay the spread-of-hours premium. Wicaksono, 2011 WL 2022644, at *7. Therefore, Plaintiffs are entitled to liquidated damages on the total amount of unpaid regular and overtime wages and spread of hours compensation under NYLL in amount equaling 25% of the total amount owed for work performed prior to April 9, 2011 and 100% of the total amount for work performed beginning April 9, 2011. Applying this formula, Manuel is owed $28,791.06, and Livio is owed $15,446.31.
Manuel's total state law claim is calculated as follows: for the work performed prior to April 9, 2011, $20,962 in unpaid New York state regular wages + $55,545.60 in unpaid New York state overtime wages + $8,847.90 in spread of hours compensation, which equals $85,355.50; for the work performed from April 9, 2011, $1,710 in unpaid New York state regular wages + $4,915.68 in unpaid New York state overtime wages + $826.50 in spread of hours compensation, which equals $7,452.18. Manuel is owed 25% of the amount prior to April 9, 2011 ($21,338.88) and 100% of the amount from April 9, 2011 ($7,452.18), totaling $28,791.06.
Livio's total state law claim is calculated as follows: for the work performed prior to April 9, 2011, $12,712 in unpaid New York state regular wages + $33,348.04 in unpaid New York state overtime wages + $5,274 in spread of hours compensation, which equals $51,334.04; for the work performed from April 9, 2011, $1,440 in unpaid New York state regular wages + $940.80 in unpaid New York state overtime wages + $232 in spread of hours compensation, which equals $2,612.80. Livio is owed 25% of the amount prior to April 9, 2011 ($12,833.51) and 100% of the amount from April 2011 ($2,612.80), totaling $15,446.31.
E. Pre-Judgment Interest
Plaintiffs also seek pre-judgment interest on their state claims. (Pls.' Mem. at 13). Unlike under the FLSA, "[p]re-judgment interest and liquidated damages under [New York] Labor Law are not functional equivalents[,]" id., because "the liquidated damages provided for in the New York Labor Law are punitive in nature" rather than compensatory. Saigon Grill, 595 F. Supp. 2d at 262 (citation omitted). Therefore, a plaintiff could recover both liquidated damages and pre-judgment interest under NYLL. Reilly, 181 F.3d at 265. However, where that plaintiff has already received an award of federal liquidated damages, the plaintiff has been compensated for some portion of the delay and "is therefore entitled to an award of prejudgment interest only on unpaid wages and spread of hours pay for which liquidated damages pursuant to the FLSA were not assessed." Santillan, 822 F. Supp. 2d at 298; see, e.g., McLean v. Garage Mgmt. Corp., Nos. 10 Civ. 3950 (DLC). 09 Civ. 9325 (DLC), 2012 WL 1358739, at *11 (S.D.N.Y. Apr. 19, 2012) (plaintiffs "entitled to NYLL prejudgment interest . . . on unpaid overtime wages for the period during which they will not receive FLSA liquidated damages"); Gurung, 2012 WL 691532, at *8 (plaintiff not entitled to pre-judgment interest on "stand-alone FLSA claims for which liquidated damages were assessed"). Accordingly, Plaintiffs are entitled to pre-judgment interest only as to their claims for which no federal liquidated damages were awarded, including the unpaid wages accruing during the longer statutory period under NYLL, the amounts attributable to the higher minimum wage under NYLL, or the stand-alone spread of hours compensation.
Plaintiffs recognize that their receipt of a liquidated damages award under federal law limits their recovery of pre-judgment interest (id.), because it is well-established that "[f]ederal law prohibits a plaintiff from recovering prejudgment interest for FLSA violations for which the plaintiff also received liquidated damages." Paz v. Piedra, No. 09 Civ. 3977 (LAK) (GWG), 2012 WL 121103, at *13 (S.D.N.Y. Jan. 12, 2012) (citing Brock v. Superior Care, Inc., 840 F.2d 1054, 1065 (2d Cir. 1988)). This rule has developed to prevent what is in essence a double recovery given that federal liquidated damages are the "functional equivalent of prejudgment interest." Santillan v. Henao, 822 F. Supp. 2d 284, 298 (E.D.N.Y. 2011); accord Saigon Grill, 595 F. Supp. 2d at 261-62 (federal liquidated damages "serve as a form of pre-judgment interest"). In other words, just as "an award of liquidated damages under the FLSA serves . . . to compensate [plaintiffs] for the delay in receiving wages that should have been paid[,]" Paz, 2012 WL 121103, at *13 (internal quotation omitted), the purpose of prejudgment interest is "to compensate a plaintiff for the loss of use of money." Reilly v. Natwest Mkts. Grp. Inc., 181 F.3d 253, 265 (2d Cir. 1999) (citation omitted).
Plaintiffs are entitled under New York law to pre-judgment interest at the statutory rate of nine percent per year. See N.Y. C.P.L.R. §§ 5001, 5004; see also Reilly, 181 F.3d at 265. Pre-judgment interest applies only to the amount of compensatory damages and excludes the amount of liquidated damages. See, e.g., Chan v. Sung Yue Tung Corp., No. 03 Civ. 6048 (GEL), 2007 WL 1373118, at *9 (S.D.N.Y. May 8, 2007). Where unpaid wages "were incurred at various times, interest shall be computed upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date." N.Y. C.P.L.R. § 5001(b). Simple pre-judgment interest is calculated from a singular, midpoint date. See, e.g., Said v. SBS Elecs., Inc., No. 08 Civ. 3067 (RJD) (JO), 2010 WL 1265186, at *9 (E.D.N.Y. Feb. 24, 2010) (calculating interest using simple rate, not compounded rate), report & rec. adopted as modified on other grounds, 2010 WL 1287080 (E.D.N.Y. Mar 31, 2010). Simple pre-judgment interest is calculated by multiplying the principal by the interest rate by the time period—from a singular, midpoint date—up until and including the date judgment is entered. See id.
In contrast to Plaintiffs' request for pre-judgment interest, to which they devote an entire section of their memorandum of law, mention of post-judgment interest is limited to the prayer for relief in the Complaint. (Compl. Prayer for Relief ¶ o). Plaintiffs cite no authority for their entitlement to such relief. Courts examining similar facts have deemed this to be an effective withdrawal of the request for post-judgment interest. See, e.g., Maldonado, 2012 WL 1669341, at *11 n.21 (denying post-judgment interest sought only in complaint's prayer for relief and plaintiffs' declarations in support of damages inquest); Gutman v. Klein, No. 03 Civ. 1570 (BMC) (RML), 2010 WL 4916722, at *5 (E.D.N.Y. Nov. 24, 2010) (denying post-judgment interest sought in passing reference in complaint and only once in factual portion of memorandum of law despite devoting an entire section of the memorandum to pre-judgment interest). Applying the same reasoning here, Plaintiffs' request for post-judgment relief should be denied.
1. Manuel's Pre-Judgment Interest
June 26, 2009 is the approximate midpoint between Manuel's start date of May 1, 2007 and his end date of August 21, 2011. As calculated above, the principal amount he is owed in unpaid wages and spread of hours compensation is $92,807.68. Therefore, a nine percent annual interest rate on $41,085.36 (reflecting the deduction for FLSA liquidated damages) should be applied from June 26, 2009 through the date judgment is entered.
Manuel's principal amount recoverable for pre-judgment interest is calculated as follows: $22,672 (in unpaid state regular wages) + $60,461.28 (in unpaid state overtime wages) + $9,674.40 (for spread of hours payment) - $51,722.32 (federal liquidated damages awarded as compensation for delayed payment) = $41,085.36.
2. Livio's Pre-Judgment Interest
Livio was employed by the Restaurants during two separate periods. Accordingly, to determine the amount of pre-judgment interest Livio is owed for each of these two periods, the Court first determines the midpoint for the two periods of employment and then calculates the principal amounts owed in unpaid wages and spread of hours compensation for each period. September 1, 2009 is the approximate midpoint for his first period of employment, from July 1, 2008 to November 1, 2010. The principal amount of unpaid wages and spread of hours compensation for this period is $51,334.04. Therefore, a nine percent annual interest rate on $14,010.04 (reflecting the deduction for FLSA liquidated damages) should be applied from September 1, 2009 through the date that judgment is entered.
Livio's principal amount recoverable for pre-judgment interest for the first period of employment is calculated as follows: ((40 (hours) * 55 (weeks) * $2.55 (difference between minimum wage and his actual wage)) + (40 hours * 67 weeks * $2.65) = $12,712 in unpaid state regular wages) + ((44 hours * 55 weeks * $6.13) + (44 hours * 67 weeks * $6.28) = $33,348.04 in unpaid state overtime wages) + ((6 hours * $7.15 * 55 weeks) + (6 hours * $7.25 * 67 weeks) = $5,274 for spread of hours payment) - $37,324 (federal liquidated damages awarded as compensation for delayed payment for first period of employment) = $14,010.04.
June 26, 2011 is the approximate midpoint for Livio's second period of employment, from May 1, 2011 through August 20, 2011. The principal amount of unpaid wages and spread of hours compensation for this period is $2,612.80. Therefore, a nine percent annual interest rate on $232 (reflecting the deduction for FLSA liquidated damages) should be applied from June 26, 2011 through the date that judgment is entered.
Livio's principal amount recoverable for pre-judgment interest for the second period of employment is calculated as follows: (40 hours * 16 weeks * $2.25 = $1,440 in unpaid state regular wages) + (10 hours * 16 weeks * $5.88 = $940.80 in unpaid state overtime wages) + (2 hours * $7.25 * 16 weeks = $232 for spread of hours payment) - $2,380.80 (federal liquidated damages awarded as compensation for delayed payment for second period of employment) = $232.
F. Attorneys' Fees and Costs
Plaintiffs also seek $14,872.50 in attorneys' fees and costs pursuant to 29 U.S.C. § 216(b) and NYLL §§ 198(1-a), 663(1). (Pls.' Mem. at 14; Faillace Aff., Ex. R at 2 (Dkt. No. 31-18)). Under the FLSA, "[a]ny employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or employees affected in the amount of . . . a reasonable attorney's fee to be paid by the defendant, and costs of the action." 29 U.S.C. § 216(b). "Both the FLSA and NYLL are fee-shifting statutes entitling [Plaintiffs] to recover . . . reasonable attorneys' fees and costs." Gurung, 2012 WL 691532, at *10; see 29 U.S.C. § 216(b); NYLL §§ 198(1-a), 663(1).
The Court notes that the Faillace Affirmation states Plaintiffs seek $7,325 in attorneys' fees and $650 in costs (Faillace Aff. ¶ 30(a)), but the spreadsheet to which it refers (and which breaks down the actual hours worked) calculates the total amount of accrued fees and costs as $14,872.50 ($13,922.50 in fees for 40.05 hours of work plus $950 in filing fees and service costs). (Faillace Aff., Ex. R at 2).
As a general matter, to calculate the "reasonable amount of attorneys' fees" owed, "[b]oth [the Second Circuit] and the Supreme Court have held that the lodestar—the product of a reasonable hourly rate and the reasonable number of hours required by the case—creates a 'presumptively reasonable fee.'" Gurung, 2012 WL 691532, at *10 (quoting Millea v. Metro-North R.R. Co., 658 F.3d 154, 166 (2d Cir. 2011) (quotation omitted)). The lodestar amount is calculated by multiplying a reasonable hourly rate by the number of hours reasonably expended on the litigation. See Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cnty. of Albany, 522 F.3d 182, 186 (2d Cir. 2008) (citing Lindy Bros. Builders, Inc. of Phila. v. Am. Radiator & Standard Sanitary Corp., 487 F.2d 161, 167 (3d Cir. 1973)). A defendant's failure either to pay the attorneys' fees and costs awarded or take an appeal causes the portion of fees awarded for NYLL violation to increase by 15%. NYLL § 663(4).
Effective April 9, 2011, NYLL § 663(4) provides: "In any civil action by an employee or by the commissioner, the employee or commissioner shall have the right to collect attorneys' fees and costs incurred in enforcing any court judgment. Any judgment or court order awarding remedies under this section shall provide that if any amounts remain unpaid upon the expiration of ninety days following issuance of judgment, or ninety days after expiration of the time to appeal and no appeal therefrom is then pending, whichever is later, the total amount of judgment shall automatically increase by fifteen percent." Therefore, if Defendants fail to pay the attorneys' fees and costs awarded by the Court or appeal them within 90 days, that portion of the judgment attributable to NYLL claims will automatically increase by 15%.
1. Reasonable Hourly Rate
District courts have broad discretion to determine a fee award. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). To assess the reasonable rate, the Court considers the prevailing market rates "for similar services by lawyers of reasonably comparable skill, experience and reputation," Gierlinger v. Gleason, 160 F.3d 858, 882 (2d Cir. 1998) (quoting Blum v. Stenson, 465 U.S. 886, 896 n.11 (1984)). The Court may also rely on its knowledge of private firms' hourly rates. Miele v. N.Y. State Teamsters Conference Pension & Ret. Fund, 831 F.2d 407, 409 (2d Cir. 1987).
A reasonable hourly rate is the rate a "paying client would be willing to pay," bearing in mind that a "reasonable, paying client wishes to spend the minimum necessary to litigate the case effectively." Arbor Hill, 522 F.3d at 190. The Court uses the "hourly rates employed in the district in which the reviewing court sits," which in this case is the Southern District of New York. See In re Agent Orange Prod. Liab. Litig., 818 F.2d 226, 232 (2d Cir. 1987) (deviation from district's reasonable hourly rates "only in the rare case where the 'special expertise' of non-local counsel was essential to the case") (citation omitted). Furthermore, when a party seeks attorneys' fees, the "burden is on the fee applicant to produce satisfactory evidence—in addition to the attorneys' own affidavits—that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." Blum, 465 U.S. at 896 n.11.
Plaintiffs are represented by the firm Michael Faillace & Associates, P.C. (See Faillace Aff. ¶ 30(i)). Plaintiffs seek to recover fees for 40.05 hours of work performed by two attorneys, Michael Faillace and Yolanda Rivero. (Id.; Faillace Aff., Ex. R at 2). Mr. Faillace is the managing member of the firm and has been practicing since 1983, and has taught employment discrimination at Fordham University and Seton Hall University law schools. (Faillace Aff. ¶ 30(i)(i)). Plaintiffs seek reimbursement for his work at a rate that the Court calculates to be $450 per hour. (Faillace Aff., Ex. R at 1). Ms. Rivero is an associate of Mr. Faillace and has been in practice since 1998, specializing in FLSA matters since 2006. (Faillace Aff. ¶ 30(i)(ii)). Plaintiffs seek reimbursement for her work at a rate that the Court calculates to be $200 per hour. (Faillace Aff., Ex. R at 1).
Unfortunately, neither the Faillace Affirmation nor the spreadsheet that details the actual hours worked provides Mr. Faillace or Ms. Rivero's hourly billing rates, a sine qua non of any fee application; however, the Court has determined their rates based on the number of hours worked and the amount billed for those hours. For example, Mr. Faillace billed $1,237.50 for 2.75 hours of work, which breaks down to a rate of $450 per hour. (Faillace Aff., Ex. R at 1). Similarly, Ms. Rivero billed $1,150 for 5.75 hours of work, which breaks down to a rate of $200 per hour. (Id.).
Courts in this District have determined that a fee ranging from $250 to $450 per hour is generally appropriate for experienced civil rights and employment law litigators. See, e.g., Maldonado, 2012 WL 1669341, at *13 (finding rates of $425 for a supervising attorney and $275 for an associate at The Legal Aid Society reasonable); Allende v. Unitech Design, Inc., 783 F. Supp. 2d 509, 514-15 (S.D.N.Y. 2011) (finding rates of $450 for partners and $300 for associates at "well-known and highly respected law firm" are "consistent with rates awarded by the courts in other FLSA or similar statutory fee cases"); Wong v. Hunda Glass Corp., No. 09 Civ. 4402 (RLE), 2010 WL 3452417, at *3 (S.D.N.Y. Sept. 1, 2010) (awarding $350 per hour to attorneys with twelve years of legal experience); De Los Santos v. Just Wood Furniture, Inc., Nos. 05 Civ. 9369 (WWE), 06 Civ. 5749 (WWE), 2010 WL 445886, at *3 (S.D.N.Y. Feb. 2, 2010) (rates of $250 to $350 per hour are reasonable for an employment attorney); Chan, 2007 WL 1373118, at *3-4 (awarding associate director of Urban Justice Center and adjunct law professor with fifteen years experience $400 per hour). Accordingly, Mr. Faillace's hourly rate of $450 and Ms. Rivero's hourly rate of $200 are reasonable.
2. Reasonable Hours Expended
"After determining the appropriate hourly billing rate, the court calculates the hours reasonably expended." Maldonado, 2012 WL 1669341, at *13 (citations omitted); see Gierlinger, 160 F.3d at 876. The Court must make "a conscientious and detailed inquiry into the validity of the representations that a certain number of hours were usefully and reasonably expended." Lunday v. City of Albany, 42 F.3d 131, 134 (2d Cir. 1994). The critical inquiry is "whether, at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures." Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992) (citation omitted); accord Nike, Inc. v. Top Brand Co., No. 00 Civ. 8179 (KMW) (RLE), 2006 WL 2946472, at *5 (S.D.N.Y. Feb. 27, 2006), report & rec. adopted, 2006 WL 2884437 (S.D.N.Y. Oct. 6, 2006). The Court should examine contemporaneous time records that identify, for each attorney, the hours expended on a task, "with a view to the value of the work product of the specific expenditures to the client's case." Luciano v. Olsten Corp., 109 F.3d 111, 116 (2d Cir. 1997) (citation omitted); see also Scott v. City of New York, 643 F.3d 56, 57 (2d Cir. 2011); N.Y. State Ass'n for Retarded Children v. Carey, 711 F.2d 1136, 1148 (2d Cir, 1983). The Court may also rely on its own experience with the case, as well as its experiences with similar submissions and arguments as additional support. Clarke v. Frank, 960 F.2d 1146, 1153 (2d Cir. 1992). But see Scott, 643 F.3d at 58 ("award based entirely on the district court judge's personal observation and opinions of the applying attorney . . . is contrary to Carey"). In addition, while using multiple attorneys "is not unreasonable per se," Nike, Inc., 2006 WL 2946472, at *7 (citing cases), "[t]he moving party . . . must demonstrate the need for each attorney's expertise." Id. Ultimately, "[m]ultiple attorneys are allowed to recover fees on a case if they show that the work reflects the distinct contributions of each lawyer." Id. (citations omitted).
As a general matter, the Court may reduce any hours that are "excessive, redundant, or otherwise unnecessary." Hensley, 461 U.S. at 434. For example, the Court can make reductions where the stated number of hours is greater than what should have been required for the work produced. See Seitzman v. Sun Life Assurance Co. of Canada, Inc., 311 F.3d 477, 487 (2d Cir. 2002); Nat'l Audobon Soc'y, Inc. v. Sonopia Corp., No. 09 Civ. 975 (PGG) (FM), 2010 WL 3911261, at *5 (S.D.N.Y. Sept. 1, 2010), report & rec. adopted, 2010 WL 5373900 (S.D.N.Y. Dec. 22, 2010). As the Second Circuit recently observed in Millea, this is "a permissible consideration and one that a trial judge is particularly well-situated to evaluate." 658 F.3d at 167.
"In lieu of making minute adjustments to individual timekeeping entries, a court may make across-the-board percentage cuts in the number of hours claimed, 'as a practical means of trimming the fat from a fee application.'" Chan, 2007 WL 1373118, at *5 (quoting In Re Agent Orange, 818 F.2d at 237); see, e.g., Simmonds v. N.Y.C. Dep't of Corr., No. 06 Civ. 5298 (NRB), 2008 WL 4303474, at *7-8 (S.D.N.Y. Sept. 16, 2008) (ordering 40% reduction where attorneys spent excessive number of hours drafting complaint, drafting and reviewing correspondence, preparing document requests, and preparing research memorandum).
Here, Plaintiffs' counsel documented 40.05 hours, and the exhibit accounting for that time indicates Ms. Rivero spent 16.4 hours working on the motion for default judgment. (See Faillace Aff., Ex. R at 1-2). Upon the Court's review of similar wage-and-hour cases, the high-end amount of hours spent on cases in a similar procedural posture (i.e., a motion for default judgment immediately following the filing of a complaint) is no more than 55 hours total. See, e.g., Wicaksono, 2011 WL 2022644, at *11 (awarding requested 54.4 hours of attorneys' fees with multiple plaintiffs); Callier v. Superior Bldg. Servs., Inc., No. 09 Civ. 4590 (ILG) (JMA), 2010 WL 5625906, at *7 (E.D.N.Y. Dec. 22, 2010) (applying an "across-the-board cut of fifteen percent" to 53.71 hours of attorney work claimed by plaintiffs' counsel); Said, 2010 WL 1265186, at *11 (awarding 41.35 hours of attorneys' fees instead of 165.4 hours sought in wage- and-hour case in which defendant defaulted). While the 40.05 hours Plaintiffs' counsel claims to have accrued is below that amount, it nevertheless seems excessive for several reasons.
First, Plaintiffs' unpaginated Memorandum is largely boilerplate, and it uses incorrect names for the parties and analyzes irrelevant dates to assess the minimum wage. (See Pls.' Mem. at 5, 9-12). Thus, it is difficult to imagine how a case that does not raise particularly novel or complex legal issues and required interaction with only two plaintiffs in preparing the complaint and default judgment papers would require Plaintiffs' counsel to expend the time they claim. For example, counsel claims that Ms. Rivero expended 16.4 hours on April 3 and 4, 2012 drafting, reviewing, finalizing, and filing the default motion. (Faillace Aff., Ex. R at 1). The work product presented to the Court simply does not justify that claim. Notably, two recent decisions issued by judges in this Court and in the Eastern District of New York deducted the fees claimed by Michael Faillace & Associates, P.C. for cases in a similar posture. See, e.g., Carrasco v. West Village Ritz Corp., No. 11 Civ. 7843 (DLC) (AJP), 2012 WL 2814112, at *7 (S.D.N.Y. July 11, 2012) (not crediting counsel for 15.05 hours billed for work on default motion because "the motion papers appear to be largely 'boiler plate' used by plaintiffs' counsel in other cases"); Santillan, 822 F. Supp. 2d at 300 (reducing hourly rate from $450 to $375—about 17%—because "nature of the work performed in this matter was relatively straightforward, particularly since the defendants defaulted, and no novel or complex issues were raised by plaintiff."). Accordingly, I recommend an across-the-board cut of 15%. See, e.g., Callier, 2010 WL 5625906, at *7 (reducing attorneys' fees by 15% for billing tasks "not of the type or duration for which a reasonable client would be willing to pay"). Plaintiffs are therefore entitled to recover a total of $11,834.13 in attorneys' fees for services rendered by Michael Faillace & Associates, P.C.
Plaintiffs' counsel request $13,922.50 in attorneys' fees. (Faillace Aff., Ex. R at 2). A 15% reduction yields a total of $11,834.13 in attorneys' fees.
3. Costs
Lastly, Plaintiffs seek the $350 court filing fee and $600 in fees for executing service of process to the multiple Defendants. (Pls.' Mem. at 14). Pursuant to NYLL § 663(1), an employee who prevails in a wage-and-hour action is entitled to recover costs. NYLL § 663(1) ("If any employee is paid by his or her employer less than the wage to which he or she is entitled under the provisions of this article, he or she shall recover in a civil action the amount of any such underpayments, together with costs all reasonable attorney's fees."); see, e.g., Smith v. Nagai, No. 10 Civ. 8237 (PAE) (JCF), 2012 WL 2421740, at *6 (S.D.N.Y. May 15, 2012) (noting documented costs "are fully compensable under the FLSA"), report & rec. adopted, 2012 WL 2428929 (S.D.N.Y. June 27, 2012); Kahlil v. Original Old Homestead Rest., Inc., 657 F. Supp. 2d 470, 478 (S.D.N.Y. 2009) ("Fee awards include 'reasonable out-of-pocket expenses incurred by attorneys and ordinarily charged to their clients.'") (quoting LeBlanc-Sternberg v. Fletcher, 143 F.3d 748, 763 (2d Cir. 1998) (citation omitted)); but see Carrasco, 2012 WL 2814112, at *7 (no recovery of costs incurred for service "in the absence of supporting documentation"). The Court has reviewed Plaintiffs' costs and determined that they are reasonable. Therefore, the Court should award Plaintiffs $950 in costs.
III. Conclusion
For the foregoing reasons, I recommend that judgment be entered in Plaintiffs' favor against Defendants as follows: Manuel should be awarded $173,321.06 in damages and Livio should be awarded $109,097.95 in damages, along with pre-judgment interest as set forth herein. I further recommend that Plaintiffs be awarded $12,784.13 in attorneys' fees and costs.
The total damages for Manuel were calculated as follows: $92,807.68 (unpaid regular wages, overtime wages, and spread of hours compensation) + $51,722.32 (liquidated damages under the FLSA) + $28,791.06 (liquidated damages under NYLL) = $173,321.06.
The total damages for Livio were calculated as follows: $53,946.84 (unpaid regular wages, overtime wages, and spread of hours compensation) + $39,704.80 (liquidated damages under the FLSA) + $15,446.31 (liquidated damages under NYLL) = $109,097.95.
PROCEDURE FOR FILING OBJECTIONS
TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from service of this Report to file written objections. See also Fed. R. Civ. P. 6. Such objections, and any responses to objections, shall be filed with the Clerk of Court, with courtesy copies delivered to the chambers of the Honorable John G. Koeltl and the undersigned, United States Courthouse, 500 Pearl Street, New York, New York 10007. Any requests for an extension of time for filing objections must be directed to Judge Koeltl. FAILURE TO FILE OBJECTIONS WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72. See Thomas v. Arn, 474 U.S. 140 (1985); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).
Dated: New York, New York
August 2, 2012
/s/_________
JAMES L. COTT
United States Magistrate Judge
Copies of this Report & Recommendation are being sent by ECF to counsel and by mail to:
Pita Grill 7 Inc. (d/b/a Pita Grill East) 1570 First Avenue New York, NY 10028 291 Seventh Food Corp. (d/b/a Pita Grill) 291 Seventh Avenue New York, NY 10028 Pita Grill NYC Corp. (d/b/a Pita Grill) 1083 Second Avenue New York, NY 10022 Pita Grill Management, Co., Inc. (d/b/a Pita Grill) 299 Broadway, Suite 1818 New York, NY 10007 Bennett Orfaly 299 Broadway, Suite 1818 New York, NY 10007 Akbar Hossain 85-38 257th Street Floral Park, NY 11001 Shahjahar Mahmud 50-23 65th Place Woodside, NY 11377 Wayne Muratore 1083 Second Avenue New York, NY 10022