Doo Nam Yang v. Acbl Corp.

• Decision Date: 05 December 2005
• Docket Number: No. 04 Civ. 8987(LBS).,04 Civ. 8987(LBS).
• Citation: 427 F.Supp.2d 327
• Parties: DOO NAM YANG, Plaintiff, v. ACBL CORP., Gold Lee Jewelry Co., and Han Sung Lee, Defendants.
• Court: U.S. District Court — Southern District of New York

427 F.Supp.2d 327

DOO NAM YANG, Plaintiff, v. ACBL CORP., Gold Lee Jewelry Co., and Han Sung Lee, Defendants.

No. 04 Civ. 8987(LBS).

United States District Court, S.D. New York.

December 5, 2005.

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Kenneth Kimberling, Steven Kyung, Choi, Asian American Legal Defense, New York City, for Plaintiff.

Jonathan Yoon Sue, Eric Robert Stern, Sacks & Sacks, LLP, New York City, for Defendants.

MEMORANDUM AND ORDER

SAND, District Judge.

Plaintiff Doo Nam Yang brings this action under the Fair Labor Standards Act of 1938 ("FLSA"), 29 U.S.C.A. § 201 et seq., and the New York Labor Law § 190 et seq., alleging that defendants Gold Lee Jewelry Company ("Gold Lee"), ACBL Corporation ("ACBL"), and Han Sung Lee failed to pay overtime and spread of hours pay. He also brings a common law claim of conversion, alleging that defendants deducted funds from his wages to pay employment taxes, but neither remitted the funds to the taxing authorities nor returned them to him. The Court has jurisdiction pursuant to 28 U.S.C. § 1331 and exercises supplemental jurisdiction over plaintiff's state law claims pursuant to 28 U.S.C. § 1367.

The Court held a two day bench trial beginning on November 2, 2005. The only witnesses were Yang and Lee. In general, the Court found Yang's testimony to be credible and corroborated by other evidence, while Lee's testimony was replete with contradictions, his demeanor was hostile, and his answers were, for the most part, unworthy of credence. The Court makes the following findings of fact and conclusions of law. See Fed.R.Civ.P. 52(a).

FINDINGS OF FACT

I. Parties

Plaintiff Doo Nam Yang is a Korean immigrant who came to the United States on January 17, 1997 and currently lives in Queens. In Korea, Yang graduated high school and worked as a mechanic repairing sewing machines. He was first hired to work for defendants in October 1997 as a trainee, and eventually assumed such duties as ring-making, electric re-wiring, and repairing motors. (Trial Tr. 13-14, Nov. 2-3, 2005.) Although there were several breaks in his employment, the employment relationship terminated for the last time on February 27, 2004.

Defendant Gold Lee was a company engaged in the creation and sale of jewelry. It was founded by defendant Han Sung Lee, who remained its president and sole owner. In 2000, Lee closed Gold Lee and opened defendant ACBL, another jewelry business, in its stead. Since 2000, Lee has been the president and sole owner of ACBL. Lee's business was originally located at 50 West 47th Street # B4, Manhattan, but moved in 2000 to 31 W. 47th Street, Suite 203.

II. Yang's Compensation

A. Wages

Although a plaintiff seeking to recover under the FLSA must show insufficient payment for hours worked, under the statute it is the employer's responsibility to "make, keep, and preserve" records of employee wages and conditions of employment. 29 U.S.C. § 211(c); see also 29 C.F.R. § 516.2.¹ When an employer has not kept such records, an employee suing for lost wages under the FLSA may carry his burden by submitting "sufficient evidence from which violations of the [FLSA] and the amount of an award may be reasonably inferred." Reich v. S. New England Telecomms. Corp., 121 F.3d 58, 66 (2d Cir.1997) (quoting Martin v. Selker Bros., 949 F.2d 1286, 1296-97 (3d Cir.1991). The burden then shifts to the employer to present evidence either of the precise wages paid or evidence to "negative the reasonableness of the inference to be drawn from the employee's evidence." Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 688, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946).² New York law incorporates a similar standard.³

Both Lee and Yang testified that, after being introduced by the Director of the Korean American Association for Rehabilitation of the Disabled,⁴ Lee interviewed and hired Yang for a trainee position at Gold Lee. The employment contract was oral (Tr. 77), and there is no evidence that defendants preserved "a written memorandum summarizing the terms" of this oral agreement, as federal law requires. 29 C.F.R. § 516.5(b)(4). Furthermore, at trial the defendants could not produce admissible records of Yang's wages during the course of his employment.⁵ With no employer-preserved records, then, Yang can meet his burden by presenting sufficient evidence to generate a reasonable inference as to what he was actually paid by defendants.

Yang testified that he was paid weekly, and initially only in cash, but that on his request he was paid partially by cash and partially by check for a few months in 2002, after which he was once again paid wholly in cash. (Tr. 30.) According to Yang, he was hired in October 1997 at a wage of $200 per week. He worked elsewhere from January 1998 until December 1998 and was unemployed from January 1999 until he resumed working for defendants on July 18, 1999. Yang testified that from July 18, 1999 until February 2000, he was paid $350 per week; from February 2000 until the end of September 2000, he was paid $400 per week; from October 2000 until February 2001, he was paid $450 per week; from March 2001 until September 2001, he was paid $500 per week; from October 2001 until the end of March 2002, he was paid $550 per week; and from April 2002 until February 27, 2004, the end of his employment, he was paid $600 per week, except that he was not working for defendants from March 2003 until the beginning of September 2003. (Tr. 28-29.)⁶ In addition, Yang testified that every holiday season he received an extra week's wages as a bonus (Tr. 30), but that he never received extra money when he worked on the weekends or other periods when he worked extended hours. (Tr. 23-24.)

The documentary and testimonial evidence largely corroborates Yang's testimony. For instance, Lee testified at trial that he hired Yang at a wage of about $250 per week (Tr. 77), a rate which essentially confirms Yang's testimony.⁷ Lee then stated that he raised Yang's wages several times over the course of Yang's tenure.⁸ Finally, Yang testified that for a few months in 2002, his $600 weekly wages were paid $300 in cash and $271 by check,⁹ and he submitted photocopies of paychecks and bank statements from this period which support his testimony. (Pl.Exs. 2, 3). All of this evidence, coupled with Yang's generally credible demeanor and Lee's self-contradictory testimony, supports Yang's account of his wages. In sum, the Court holds that Yang has met his burden of presenting sufficient evidence from which his wages may be reasonably inferred.

Defendants attacked Yang's testimony regarding his wages in two principal ways. First, they endeavored to portray plaintiffs lawsuit as an attempt to take advantage of defendants' alleged loss of wage records in an office flood. The Court, it must be noted, is extremely skeptical that such records ever existed. However, even if records of plaintiffs wages did exist at one time, this attack fails to neutralize the inference arising from plaintiff's credible and corroborated testimony of his wages.

Second, defendants also attempted to cast doubt on plaintiffs testimony by submitting plaintiffs tax returns for 1999, 2000, and 2001, and plaintiffs son's tax returns for 2003 and 2004, on which plaintiff was claimed as a dependent. (Defs.Exs. I, J, K, L, M.) In 1999, for example, Yang reported only $1,854 in wages though he testified to working for defendants for six months of that year at a rate of $350 per week. When asked if his tax return was accurate, Yang exercised his Fifth Amendment right and did not respond. (Tr. 46.) On his 2000 and 2001 returns, he left blank the line where wages and salary must be reported, and again took the Fifth Amendment when asked if the 2001 return was accurate. (Tr. 51.) When asked if he submitted a tax return for 2002 or for the years his son claimed him as a dependent, Yang also exercised his Fifth Amendment right. (Tr. 53-54.) While this evidence does cast some doubt on plaintiffs credibility, it does not "negative the reasonableness of the inference to be drawn from [Yang's] evidence." Mt. Clemens, 328 U.S. at 688, 66 S.Ct. 1187. Having observed plaintiffs demeanor on the stand, the Court believes that while Yang may have filed false tax returns, his testimony concerning his wages was truthful.

Finally, the Court credits Yang's testimony that other than his Christmas bonus check, he received no additional payments other than the weekly payments described above, regardless of any additional hours he may have worked. (Tr. 23-24.) For instance, Yang testified that that there were only two periods covering a total of about six weeks where defendants used timecards to record his hours, and that at all other times no one kept track of his working time. (Tr. 36-37.) Lee, meanwhile, maintained that all of his employees punched timecards every morning and every evening. (Tr. 81.) The Court resolves this dispute in favor of plaintiff, because even assuming arguendo that years of timecards were destroyed in the January 2004 flood, defendants did not produce any timecards for the period plaintiff worked after the flood. If defendants had created and maintained such records as the law requires, their production would have been simple. With no evidence that defendants ever kept track of the precise hours plaintiff worked, the Court disbelieves the assertion that defendants calculated plaintiffs hours in excess of 40 and paid the required overtime premium.¹⁰

That said, although for purposes of the FLSA "Where is a rebuttable presumption that a weekly salary covers 40 hours," that presumption can be overcome by showing the existence of an "employer-employee agreement that the salary cover a different number of hours." Giles, 41 F.Supp.2d at 317. In this case, the plaintiff concedes that there was an agreement that the salary cover 50 hours of work at plaintiff's regular hourly rate. See Pl.'s Pre-Trial Mem. of Law at 10 n. 8....