Torres v. Gristede's Operating Corp.

• Decision Date: 28 August 2008
• Docket Number: No. 04 Civ. 3316 (PAC).,04 Civ. 3316 (PAC).
• Citation: 628 F.Supp.2d 447
• Parties: Carlos TORRES, Bobby Irizarry, Ruben Mora, Joselito Arocho, Lewis Chewning, Joseph Crema, Alfred Croker, Frank Deleon, Mario DiPreta, William Helwig, Robert Misuraca, Robert Pastorino, Victor Phelps, Daniel Salegna, and Gilberto Santiago, on behalf of themselves and all others similarly situated, Plaintiffs, v. GRISTEDE'S OPERATING CORP., Namdor, Inc., Gristede's Food, Inc., City Produce Operating Corp., Gristede's Foods NY, Inc., Galo Balseca, John Catsimatides, and James Monos, Defendants. Gristede's Foods NY, Inc., Gristede's Operating Corp., Namdor, Inc., Gristede's Foods, Inc., and City Produce Operating Corp., Counter-Claimants, v. Carlos Torres and Lewis Chewning, Counter-Defendants.
• Court: U.S. District Court — Southern District of New York

628 F.Supp.2d 447

Carlos TORRES, Bobby Irizarry, Ruben Mora, Joselito Arocho, Lewis Chewning, Joseph Crema, Alfred Croker, Frank Deleon, Mario DiPreta, William Helwig, Robert Misuraca, Robert Pastorino, Victor Phelps, Daniel Salegna, and Gilberto Santiago, on behalf of themselves and all others similarly situated, Plaintiffs, v. GRISTEDE'S OPERATING CORP., Namdor, Inc., Gristede's Food, Inc., City Produce Operating Corp., Gristede's Foods NY, Inc., Galo Balseca, John Catsimatides, and James Monos, Defendants.

Gristede's Foods NY, Inc., Gristede's Operating Corp., Namdor, Inc., Gristede's Foods, Inc., and City Produce Operating Corp., Counter-Claimants, v. Carlos Torres and Lewis Chewning, Counter-Defendants.

No. 04 Civ. 3316 (PAC).

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

August 28, 2008.

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Adam T. Klein, Douglas Christopher James, Linda Anne Neilan, Lewis M. Steel, Molly Anne Brooks, Rachel Megan Bien, Outten & Golden, LLP, New York, NY, for Plaintiffs.

Christopher Alan Parlo, Amanda Nicole Slatin, Morgan, Lewis & Bockius LLP, Kevin J. Nash, Finkel Goldstein Rosenbloom & Nash LLP, Arthur Harlod Aufses, III, Jay Hyun Park, Jr., Kramer Levin Naftalis & Frankel, LLP, New York, NY, for Defendants.

Justin Mitchell Swartz, Outten & Golden, LLP, New York, NY, for Plaintiffs/Counter-Defendants.

Joseph Ted Donovan, Finkel Goldstein Rosenbloom & Nash LLP, New York, NY, for Defendants/Counter-Claimants.

ORDER AND OPINION

Honorable PAUL A. CROTTY, District Judge:

Plaintiffs¹ are a class of current and former "managerial" employees of the New York supermarket chain Gristede's. In their original Complaint, filed April 30, 2004, Plaintiffs alleged that Defendants² willfully failed to record, credit, and compensate similarly situated employees for hours worked in excess of forty hours per week in violation of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq., and New York Labor Law ("NYLL") §§ 650 et seq. They have subsequently alleged claims for common law fraud and retaliation pursuant to FLSA, 29 U.S.C. § 215(3), and NYLL § 215(2), against Defendant Gristede's only. By Memorandum Decision and Order dated September 29, 2006, the Court approved Plaintiffs' motion to certify a collective action under the FLSA pursuant to 29 U.S.C. § 216(b) and to proceed as a class action on the state law claims under Federal Rules of Civil Procedure 23(a) and 23(b)(3). See Torres v. Gristede's Operating Corp. (Torres I), No. 04 Civ. 3316(PAC), 2006 WL 2819730 (S.D.N.Y. Sept. 29, 2006). Specifically, the Court certified a class of "all persons employed by defendants as Department Managers or Co-Managers who were not paid proper overtime premium compensation for all hours that they worked in excess of forty in a workweek any time between April 30, 1998 and the date of final judgment in this matter." Id. at *11.

Plaintiffs now move for partial summary judgment on nine legal claims for which they assert there are no material factual issues are left to be tried:

1) Defendants' Fifth Affirmative Defense—the "white collar exemption" to the FLSA and NYLL claims;

2) Defendants' liability for the overtime claims of the co-manager Plaintiffs and class members;

3) Plaintiffs' claim that Gristede's policy of deleting "unauthorized overtime" from class members' time records was unlawful and constituted a violation of the FLSA and NYLL;

4) Defendants' Second, Third, and Fourth Affirmative Defenses of laches, unclean hands and improper conduct, and waiver and estoppel, respectively;

5) Plaintiffs' demand for liquidated damages, based on their contention that Defendants cannot prove their allegedly unlawful actions were conducted in "good faith" and upon a "reasonable" belief of lawfulness;

6) Plaintiffs' demand for a three-year statute of limitations, based on allegations of willful misconduct;

7) Plaintiffs' claim that Gristede's failed to keep accurate records of class members' time, which would entitle Plaintiffs to appropriate presumptions, evidentiary rulings, and jury instructions at trial;

8) Defendants' allegedly frivolous counterclaims against Torres and Chewning; and

9) Plaintiffs' claim that Gristede's retaliated against the Individual Plaintiffs by filing the counterclaims.

For the reasons stated below, Plaintiffs' motion is GRANTED, with the exception of their seventh claim which is DENIED.

I. Background

A. Facts

For the purposes of this opinion, the Court assumes familiarity with Torres I. That opinion provides a comprehensive description of Plaintiffs' FLSA, NYLL, and common law claims and requested relief. See id. at *1. It also contains a thorough statement of the relevant facts, dividing the factual discussion into four categories: payroll practices; analysis of duties; unauthorized overtime; and working past the clock. See id. at **2-5. As the parties conducted no additional discovery subsequent to Torres I, the Court's factual summary was based on substantially the same source material—primarily expert reports, depositions, and affidavits—on which the parties rely for the present motion. In lieu of a duplicative factual statement, the Court relies on Torres I and makes additional references to the record where appropriate for the discussion that follows.

B. Procedural History and Counterclaims

On April 30, 2004, Plaintiff Carlos Torres filed an initial class action complaint alleging violations of federal and state wage and hour laws. (See Compl.) On June 29, 2004, Torres amended the complaint to add Named Plaintiffs Mora and Irizarry. (See 1st Am. Compl.) On March 25, 2005, Plaintiffs amended the complaint again, adding Defendants Balseca, Catsimatides, and Manos (the "Individual Defendants"), joining twelve more Named Plaintiffs, including Chewning, and alleging a new cause of action for common law fraud against Gristede's. (See 2d Am. Compl.) On April 22, 2005, Defendants answered Plaintiffs' pleadings for the first time, denying all claims and asserting unspecified counterclaims against Torres and Chewning. (See Answer to 2d Am. Compl.) Plaintiffs considered the counterclaims an impermissible act of retaliation and immediately filed a Motion for an Order to Show Cause on April 26, 2005 seeking injunctive and other relief and sanctions. (See Neilan Decl., Ex. IIII ("Pls.' Mem. of Law in Support of Motion for an Order to Show Cause").) A hearing on the Order to Show Cause went forth on April 27, 2005 before Magistrate Judge Andrew J. Peck, who declined to enter Plaintiffs' proposed order, but noted that the counterclaims appeared to be "somewhat retaliatory on the defendant." (See Neilan Decl., Ex. III ("OSC Tr.") at 16:21.) Plaintiffs then filed a Third Amended Complaint stating FLSA and NYLL retaliation claims on May 3, 2005. (See 3d Am. Compl.)

C. Legal Standard for Summary Judgment

A motion for summary judgment shall be granted if the pleadings demonstrate that "there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A genuine issue of material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). But "[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no `genuine issue for trial.'" Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citations omitted). The moving party initially bears the burden of demonstrating that no genuine issues of material fact remain. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once this showing is made, the nonmoving party may not rely solely on "[c]onclusory allegations, conjecture, and speculation," Niagara Mohawk Power Corp. v. Jones Chem. Inc., 315 F.3d 171, 175 (2d Cir.2003) (internal citations and quotation marks omitted), but must present specific evidence in support of its contention that there is a genuine dispute as to the material facts. Fed. R.Civ.P. 56(e). The Court resolves all ambiguities and draws all factual inferences in favor of the nonmovant, but "only if there is a `genuine' dispute as to those facts." Scott v. Harris, 550 U.S. 372, 127 S.Ct. 1769, 1776, 167 L.Ed.2d 686 (2007) (citing Fed.R.Civ.P. 56(c)).

II. Discussion

A. The "White Collar" Exemption

As its Fifth Affirmative Defense, Gristede's maintains that it is under no obligation to pay co-managers and department managers overtime wages because they are executive or administrative employees covered by the so-called "white collar exemption" to the FLSA, 29 U.S.C. § 213(a)(1), and corresponding NYLL regulations, 12 N.Y.C.R.R. §§ 142-2.2, 142-2.14. Plaintiffs contend they are entitled to summary judgment on this affirmative defense because Gristede's cannot prove that class members perform work or earn compensation commensurate with executive or administrative employment.

The FLSA requires that all hours worked in excess of forty hours per week be compensated at one and one-half times the minimum wage. 29 U.S.C. § 207(a)(1). The statute exempts from overtime coverage, however, "any employee employed in a bona fide executive, administrative, or professional capacity ... as such terms are defined and delimited ... by regulations of the Secretary [of Labor]." Id. § 213(a)(1). The regulations promulgated by the Secretary of Labor (the "Secretary") define an executive, administrative, or professional employee as someone who performs certain duties and is paid on a salary basis at a rate of not less than $455 per week. See 29 C.F.R. §§ 541.100, 541.600.³ The requirements are substantially the same under the NYLL.⁴ The parties do not dispute that co-managers and department managers receive...