Galvez v. 800 Ginza Sushi Inc., 19 Civ. 8549 (JPC)

• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)
• Writing for the Court: JOHN P. CRONAN, UNITED STATES DISTRICT JUDGE
• Docket Number: 19 Civ. 8549 (JPC)
• Parties: GELASIO ESPINOBARROS GALVEZ, SALVADOR GALVEZ GARCIA, EUGENIO LUNA REYES, PLACIDO GALVEZ NARVAEZ, and ALEXANDER HERNANDEZ VICENTE, Plaintiffs, v. 800 GINZA SUSHI INC. d/b/a GINZA JAPANESE RESTAURANT and CHUN YONG CHEN, Defendants.
• Decision Date: 11 March 2022

GELASIO ESPINOBARROS GALVEZ, SALVADOR GALVEZ GARCIA, EUGENIO LUNA REYES, PLACIDO GALVEZ NARVAEZ, and ALEXANDER HERNANDEZ VICENTE, Plaintiffs,
v.
800 GINZA SUSHI INC. d/b/a GINZA JAPANESE RESTAURANT and CHUN YONG CHEN, Defendants.

No. 19 Civ. 8549 (JPC)

United States District Court, S.D. New York

March 11, 2022

OPINION AND ORDER

JOHN P. CRONAN, UNITED STATES DISTRICT JUDGE

Chun Yong Chen (“Chen”) owned 800 Ginza Sushi Inc. (“Ginza”), which operated a sushi restaurant just east of Central Park in Manhattan. Four of the restaurant's former delivery workers and a former dishwasher have sued Ginza and Chen for violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and the New York Labor Law (“NYLL”). Plaintiffs allege that Defendants did not pay them the minimum wage, overtime, or spread-of-hours compensation; illegally required the delivery worker Plaintiffs to purchase and maintain their own bicycles and to purchase various related equipment without reimbursement; and did not provide Plaintiffs wage notices and statements as required under New York law. With discovery now concluded, Plaintiffs have moved for summary judgment on liability with respect to all wage-and-hour and notice claims, as well as concerning Defendants' willfulness and Plaintiffs' entitlement to liquidated damages.

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For reasons that follow, the Court grants Plaintiffs summary judgment as to liability on most of their wage-and-hour claims, with the exception being their tools-of-the-trade claims that pertain to their alleged purchases of bicycle gear. The undisputed material facts further establish that Ginza's business activities came within the scope of the FLSA, Chen is individually liable for any federal and state labor law violations, Defendants acted willfully in violating the FLSA's minimum wage and overtime provisions (triggering an extended three-year federal statute of limitations), and that Plaintiffs are entitled to liquidated damages as to their minimum wage, overtime, and spread-of-hours claims. Questions remaining for trial therefore consist of (1) Defendants' liability on the bicycle gear component of Plaintiffs' tools-of-the-trade claims, (2) whether Defendants willfully violated the FLSA's tools-of-the-trade provisions, (3) whether Plaintiffs are entitled to liquidated damages to remedy Defendants' violations of the FLSA's and the NYLL's tools-of-the-trade provisions, (4) Defendants' liability on Plaintiffs' unjust enrichment claims, and (5) a determination of damages.

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I. Background

A. Facts^[1]

Ginza operated Ginza Japanese Restaurant, a now-defunct establishment formerly located at 800 Lexington Avenue in Manhattan. Defts. 56.1 Stmt. ¶ 3. Plaintiffs worked at Ginza for varying periods between 2010 and 2020. Id. ¶ 1; Chen Dep. Tr. at 20:15-21:4. According to their deposition testimony, Gelasio Espinobarros Galvez (“Espinobarros Galvez”) worked at Ginza from September 21, 2014 through early January 2018, Espinobarros Galvez Dep. Tr. at 37:7-39:6; Salvador Galvez Garcia (“Galvez Garcia”) worked at Ginza from January 2015 through March 2017, Galvez Garcia Dep. Tr. at 33:24-34:4; Eugenio Luna Reyes (“Luna Reyes”) worked at Ginza from October 15, 2015 through March 15, 2020, Luna Reyes Dep. Tr. at 39:8-17; Placido Galvez Narvaez (“Galvez Narvaez”) worked at Ginza from January 2010 through September 2012 and then again from February 2013 through May 2018, Galvez Narvaez Dep. Tr. at 29:2-31:10; and

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Alexander Hernandez Vicente (“Hernandez Vicente”) worked at Ginza from December 15, 2017 through August 31, 2019, Hernandez Vicente Dep. Tr. at 36:11-17. Cf. Chen Time Records (reflecting slightly different start and end dates for certain Plaintiffs). Four Plaintiffs- Espinobarros Galvez, Galvez Garcia, Luna Reyes, and Hernandez Vicente-worked as delivery workers, while Galvez Narvaez was primarily a dishwasher. Defts. 56.1 Stmt. ¶ 2.

Chen owned Ginza from the restaurant's opening in 2004 or 2005 until its closing in March 2020, acting as Ginza's Chief Executive Officer. Chen Dep. Tr. at 20:17-21:15; Defts. 56.1 Stmt. ¶ 4. As Ginza's “manager and boss, ” Chen hired, fired, supervised, and directed the restaurant's employees, including setting the delivery workers' and dishwashers' hours and wages. Defts. 56.1 Stmt. ¶¶ 6-11; Chen Dep. Tr. at 58:4-9, 61:2-63:2, 64:9-65:5. Similarly, Plaintiffs all knew Chen, who went by the name “Jacky, ” to be an owner of Ginza and/or someone responsible for paying their salaries.^[2] See Defts. 56.1 Stmt. ¶ 4; Espinobarros Galvez Dep. Tr. at 57:21-58:18; Galvez Garcia Dep. Tr. at 35:16-17, 41:6-7, 43:9-12; Luna Reyes Dep. Tr. at 41:10-12, 59:10-20; Galvez Narvaez Dep. Tr. at 63:3-6; Hernandez Vicente Dep. Tr. at 53:18-21.

1. Defendants' Recordkeeping

Defendants have not produced written records reflecting the wages paid to Plaintiffs during their employment and maintain that any such records have been lost. Defts. 56.1 Stmt. ¶¶ 19-22. Chen testified that he paid Plaintiffs in cash and handwrote their wages in two notebooks. Chen Dep. Tr. at 34:25-37:24; Defts. 56.1 Stmt. ¶¶ 22-23. Chen said that he kept the first notebook at home, but lost it some point, and then started a new notebook, which he lost in March 2020. Chen Dep. Tr. at 36:20-37:22, 110:6-14. Defendants further contend that they kept certain business

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records at the restaurant, including on a computer, but their landlord discarded those records when the restaurant was closed in March 2020. Defts. 56.1 Stmt. ¶ 22; see Chen Dep. Tr. at 42:19-43:12, 103:2-5.^[3] Defendants acknowledge that they never maintained records of tips received by the delivery workers. Defts. 56.1 Stmt. ¶ 19; see Chen Dep. Tr. at 101:9-15 (Chen testifying: “I did not record each person get how much tip. And I just paid them on the spot and paid them cash. And the record in the computer is the total tips of the whole restaurant received.”).

While Chen acknowledged at his deposition that he did not use the same wage notice issued by the New York State Department of Labor, he insisted that he instead gave his employees a handwritten explanation of their rates of pay and schedules during the hiring process. Chen Dep. Tr. at 93:4-12, 94:13-95:21; see Defts. 56.1 Stmt. ¶ 52. Chen did not retain copies of any such papers, Chen Dep. Tr. at 93:23-25, but he described them as follows:

This is not a formal document. It's just a piece of paper to explain it to this new hire that -- how many days he should work, every day from what time to what time, and what day he should be -- his day off and what's the hourly rate. And so he can bring it home with him and -- because they may not make the decision on the spot. And this is something to explain it to them and clearly. And they usually either throw them away if they decided to work or they take it with them home. And I never keep them myself.

Id. 94:13-23. Plaintiffs denied, however, that Chen provided such notices. Espinobarros Galvez Dep. Tr. at 41:24-43:16; Galvez Garcia Dep. Tr. at 40:25-42:4; Luna Reyes Dep. Tr. At 43:10-13; Hernandez Vicente Dep. Tr. at 42:16-43:9.

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Defendants paid Plaintiffs their biweekly wages by cash enclosed in envelopes. Defts. 56.1 Stmt. ¶ 51. Chen testified that he wrote payment information, including wages, overtime rates, and hours, on the envelopes. Chen Dep. Tr. at 77:24-78:11, 96:9-13, 97:2-8. Plaintiffs, however, all testified that Chen did not do that, instead recalling that the envelopes only had writing in a foreign language, presumably Chinese, that may have been their names. Espinobarros Galvez Dep. Tr. at 79:3-9; Galvez Garcia Dep. Tr. at 56:10-15; Luna Reyes Dep. Tr. at 60:4-12; Galvez Narvaez Dep. Tr. at 85:10-18; Hernandez Vicente Dep. Tr. at 55:2-11.

The parties dispute whether Defendants maintained contemporaneous time records for the hours each Plaintiff worked. Defts. 56.1 Stmt. ¶ 14. Chen testified that while his employees did not record their “time in or out anywhere, ” Chen Dep. Tr. at 73:11-13, he tracked their schedules on his tablet, id. at 69:2-7. Defendants produced time records allegedly representing Plaintiffs' time worked. See generally Chen Time Records. Chen also testified that he did not record hours employees worked during their scheduled breaks unless he had requested them to work during that break. Chen Dep. Tr. at 75:4-16. Most of the Plaintiffs, on the other hand, testified that no one at the restaurant tracked their hours. Galvez Garcia Dep. Tr. at 47:18-25; Luna Reyes Dep. Tr. at 93:19-94:4; Galvez Narvaez Dep. Tr. at 71:24-72:13; Hernandez Vicente Dep. Tr. at 49:6-12.^[4]

2. Plaintiffs' Wages

At their depositions, Plaintiffs testified that Defendants paid them the following flat biweekly salaries: Espinobarros Galvez at $600 from September 2014 to January 2018, Espinobarros Galvez Dep. Tr. at 37:7-38:9, 46:3-16; Galvez Garcia at $600 from January 2015 to

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March 2017, Galvez Garcia Dep. Tr. at 33:24-34:4, 41:8-17, 41:22-24, 43:9-12; Luna Reyes at $525 from October 2015 to about June 2019, Luna Reyes Dep. Tr. at 39:8-17, 59:2-6, 60:20-24; Galvez Narvaez at $800 both from January 2010 to September 2012 and from February 2013 to early 2018, and then increased to $1, 000 at some point in early 2018 until May 2018, Galvez Narvaez Dep. Tr. at 29:4-31:10, 49:14-50:20, 75:16-18; and Hernandez Vicente at $550 from December 15, 2017 to around March 2019, and then $600 from around March 2019 to August 31, 2019, Hernandez Vicente Dep. Tr. at 36:11-17, 44:5-18, 49:16-25. See Defts. 56.1 Stmt. ¶¶ 28-29. Luna Reyes further testified that, starting in approximately June 2019 through March 15, 2020, he was paid a daily salary of $60 and worked six days per week. Luna Reyes Dep. Tr. at 58:18-23, 60:20-24; Defts. 56.1 Stmt. ¶ 29. Defendants deny these assertions, citing Chen's deposition testimony that he paid Plaintiffs more if they worked over forty hours in a week,...