Scalia v. Liberty Gas Station & Convenience Store, LLC
| Decision Date | 16 March 2020 |
| Docket Number | 5:17-cv-00561 (BKS/ATB) |
| Citation | 444 F.Supp.3d 390 |
| Parties | Eugene SCALIA, Secretary of Labor, United States Department of Labor, Plaintiff, v. LIBERTY GAS STATION AND CONVENIENCE STORE, LLC, Liberty Pizza & Convenience, Inc., and Huseyin Turan, Individually, Defendants. |
| Court | U.S. District Court — Northern District of New York |
For Plaintiff: Kate S. O'Scannlain, Solicitor of Labor, Jeffrey S. Rogoff, Regional Solicitor, Amy Tai, Alexander M. Kondo, Trial Attorneys, U.S. Department of Labor, Office of the Solicitor, 201 Varick Street, Room 983, New York, NY 10014
For Defendants Liberty Gas Station and Convenience Store, LLC and Huseyin Turan: Anas Saleh, 404 Oak Street, Suite 288, Syracuse, NY 13203.
For Defendant Liberty Pizza & Convenience, Inc.: Lauren Marie Monforte, Monforte Law Office, 120 East Washington Street, Suite 943, Syracuse, NY 13202.
I. INTRODUCTION
Plaintiff Eugene Scalia, Secretary of Labor, United States Department of Labor ("the Secretary"), brings this action under Sections 16(c) and 17 of the Fair Labor Standards Act (the "Act," or "FLSA"), 29 U.S.C. §§ 201 et. seq. (Dkt. No. 1). The Secretary alleges that Defendants Huseyin Turan, Liberty Gas Station and Convenience Store, LLC ("Liberty Gas"), and Liberty Pizza & Convenience, Inc. ("Liberty Pizza") violated sections 6, 7, 11(c), 15(a)(2), and 15(a)(5) of the Act, U.S.C. §§ 206, 207, 211, 215, by failing to adequately keep records and pay their employees the prevailing federal minimum wage and overtime. (Dkt. No. 1, ¶¶ 50–56). Presently before the Court is the Secretary's motion for partial summary judgment, (Dkt. No. 78), which Defendants oppose. (Dkt. Nos. 81, 87). For the reasons that follow, the Secretary's motion is granted.
II. FACTS
The relevant facts are undisputed. (Dkt. Nos. 78-2; 81-3, 87-2).2 Liberty Gas is a "gas station, convenience store," and pizzeria, located in North Syracuse, New York. (Dkt. No. 78-9, at 11, 22). In addition to gasoline, pizza, and other food items, Liberty Gas also sells common convenience-store goods, such as lottery tickets and cigarettes. (Id. at 63). In 2017, Liberty Gas had gross annual sales of "[a] couple million dollars." (Id. ; see also Dkt. No. 78-15, at 2 ()). Liberty Pizza "is a pizza shop with some convenience store" items, located in Jamesville, New York. (Dkt. No. 78-9, at 11, 23–24). In addition to pizza, Liberty Pizza "[s]ells beer, cigarette[s], and lottery" tickets and has seating for "about [forty] people." (Id. at 23). In 2017, Liberty Pizza had gross annual sales between $500,000 and $1 million. (Id. at 64; see also Dkt. No. 78-16, at 2 ()).
Liberty Gas and Liberty Pizza are "two separate corporations" and file separate tax returns. (Dkt. No. 78-9, at 98; Dkt. No. 78-15; Dkt. No. 78-16). However, during the time period relevant to this dispute, both Liberty Gas and Liberty Pizza did business as "Liberty Pizza". (Dkt. No. 78-9, at 9–10). They also used the same logo, virtually identical websites, and the same email address. (Id. at 61–62; Dkt. Nos. 78-12, 78-13). Both businesses were sold, separately, in 2018 to new owners who are not parties to this action. (Dkt. No. 78-9, at 6–8).
Defendant Turan joined Liberty Gas when it opened in September 2010. (Id. at 11–12). From his start in 2010 until January 2017, Turan was the "manager" and "person in charge" at Liberty Gas. (Id. at 12). In this role, Turan hired and fired employees, determined employees' compensation, created employees' weekly schedules, granted time off, and managed the time-keeping process. (Id. at 13, 66, 71). Beyond employment matters, Turan also ordered inventory, arranged to have menus designed, and arranged to have a website designed for Liberty Gas. (Id. at 13, 54–57). Turan obtained a five-percent ownership interest in Liberty Gas in 2016. (Dkt. No. 78-8, at 8).
In January 2017, Turan "ceased day-to-day involvement with Liberty Gas" and "went to Liberty Pizza ... [to] work there" instead. (Id. at 9; Dkt. No. 78-9, at 14). He "told [his] uncle3 ... [he] cannot manage this place [anymore]" because of the issues that had arisen with the Department of Labor. (Dkt. No. 78-9, at 13–14). At that point, Turan was no longer the manager and was not involved "in the day-to-day operations of Liberty Gas." (Dkt. No. 78-9, at 17; Dkt. No. 78-8, at 9). When Turan made this transition, Hossein Rajabi took over as manager of Liberty Gas until December 2017. (Dkt. No. 78-9, at 14, 18; Dkt. No. 78-11, at 9). During this time, Rajabi still considered Turan to be his boss and sought Turan's approval before hiring or firing anyone. (Dkt. No. 78-11, at 9–11). According to Rajabi, throughout this entire time, Turan was "first" in the hierarchy; another manager, Victoriya Konochuck, was "second"; and Rajabi himself was "third." (Id. at 16). Additionally, Turan continued to determine employees' compensation and handled most scheduling. (Id. at 12, 15).
Turan was the "owner" and sole shareholder of Liberty Pizza until June 2018. (Dkt. No. 78-9 at 6, 27, 35–36; Dkt. No. 78-14, at 2). Prior to January 2017, Turan hired Jeffrey Fox "[a]s the person in charge" at Liberty Pizza. (Dkt. No. 78-9, at 26). Turan himself worked at Liberty Pizza only "sporadically, as a substitute for food service employees." (Dkt. No. 78-8, at 8). Additionally, Turan would "go in ... maybe once a week" to collect money from the safe and "deposit [it] to the bank." (Dkt. No. 78-9, at 27–28). Despite this limited role, "[w]henever [Turan] was at one location, he was the boss." (Dkt. No. 78-10, at 23). He hired employees, took responsibility for compensation, and reviewed the business's bank account. (Dkt. No. 78-9, at 25–27, 88). Turan also set his own compensation at Liberty Pizza. (Id. at 29).
Upon his departure from Liberty Gas in January 2017, Turan became the person "in charge" at Liberty Pizza. (Dkt. No. 78-9, at 32). In this role, Turan "work[ed] daily at Liberty Pizza, where he supervise[d] employees, [was] responsible for hiring and firing, cook[ed], and perform[ed] other daily tasks as necessary." (Dkt. No. 78-8, at 8–9). In June 2018, Turan sold Liberty Pizza to Satar Mohammadi for $100,000. (Dkt. No. 78-9, at 6–7). As of the sale, Turan no longer received any profits from Liberty Pizza, but he remained responsible for the business's lease. (Id. ).
Liberty Gas and Liberty Pizza both employed staffs consisting generally of cashiers, cooks, and delivery drivers. (See id. at 30, 37–38, 82, 96–97). In some cases, the same employees worked at both businesses, even during the same week. (Id. at 38–39, 84–85, 96). This often occurred when one of the businesses was short-staffed. (Id. at 99). Though employees worked at different locations during the same week, they received "a paycheck from each separate store." (Id. at 40–41). Three examples follow.
During the week of September 5, 2016, Jeffrey Fox worked 36 hours at Liberty Gas and 19 hours at Liberty Pizza, for a total of 55 hours between both locations. (Id. ; Dkt. No. 78-21, at 3; Dkt. No. 78-22, at 4). Fox did not receive any overtime pay for this work. (Dkt. No. 78-9, at 98). Instead, he was paid separately by each location at his regular rate of $10.00 per hour. (Dkt. No. 78-21, at 3, 5; Dkt. No. 78-22, at 4–5). The following week, Fox worked 31 hours at Liberty Gas and 21 hours at Liberty Pizza, for a weekly total of 52 hours. (Dkt. No. 78-9, at 98). Once again, Fox was not paid any overtime and instead received "one check from one store, another check from another store." (Id. ). This pattern continued for most weeks between September 2016 and October 2017. (Dkt. No. 78-3, at 4–5; Dkt. No. 78-4, at 3–5).
During the week of September 5, 2016, Hossein Rajabi recorded 40 hours of work at Liberty Gas and another 36 hours at Liberty Pizza. (Dkt. No. 78-21, at 4; 78-22, at 4). For these hours, Rajabi was paid separately by each location, at his regular rate of $13.00 per hour. (Dkt. No. 78-4, at 6; Dkt. No. 78-21, at 4; Dkt. No. 78-22, at 4). This practice occurred most weeks between August and October 2016, with Rajabi regularly working over 70 hours per week between both locations. (Dkt No. 78-4, at 6).
Finally, during the week ending April 2, 2017, Christopher Williams worked 26.5 hours at Liberty Gas and 25.5 hours at Liberty Pizza, for a weekly total of 52 hours between both locations. (Dkt. No. 78-4, at 7; Dkt. No. 78-9, at 109). Williams was not paid any overtime for this work. (Dkt. No. 78-9, at 109). This practice occurred for most weeks from March to July 2017. (Dkt. No. 78-4, at 7).
In February 2016, Zarif Arif started work as a delivery driver for Liberty Gas. (Dkt. No. 78-3, at 3). On his first day, he worked for "six to eight hours" but "was beat up" during one of his deliveries. (Dkt. No. 78-9, at 1223; Dkt. No. 78-11, at 19). Arif went to the hospital "right from the [delivery] place." (Dkt. No. 78-9, at 122). Arif "did not get paid for that day" and "never returned to work." (Id. at 125–26). Turan has not seen Arif since the day of the incident. (Id. at 122).
In October 2015, the Department of Labor's Wage and Hour Division ("WHD") began an investigation into Liberty Gas. Dkt. No. 78-3. At that time, "WHD found that Liberty Gas failed to pay overtime to Turan." (Id. ). "Turan served as Liberty Gas's representative during the investigation, and the company agreed to come into compliance" with the FLSA's overtime requirements. (Id. ). The documents provided by Liberty Gas to WHD during that investigation "did not, on their face, show that employees regularly worked over forty hours." (Id. ¶ 7).
In April 2016, WHD...
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