Yu G. Ke v. Saigon Grill, Inc.

Decision Date21 October 2008
Docket NumberNo. 07 Civ.2329(MHD).,07 Civ.2329 (MHD).,07 Civ.2329(MHD).
Citation595 F.Supp.2d 240
PartiesYU G. KE, Shu Hua Chen, Jian L. Lin, Bao J. Chen, Guo Q. Chen, Jian Y. Chen, Jie Chen, Ming H. Chen, Shu Hui Chen, Shu Jian Chen, Shu Jin Chen, Wen D. Chen, Wen Z. Chen, Xian Y. Chen, Xiang Y. Chen, Guo Q. Chen, De S. Chi, Lian G. Chi, Zhao Y. Dong, Xue Y. Huang, Bing X. Li, Qiang H. Li, Qi H. Lian, Li Q. Lin, Ming Lin, Xin W. Lin, Yi L. Lin, Boa G. Xie, De K. Xie, Mu L. Xie, Rui G. Xie, Zhi G. Xie, Rui H. You, Yu M. Yu, Wen R. Zheng and Yu X. Zhou, Plaintiffs, v. SAIGON GRILL, INC., Saigon Gourmet Restaurant Inc., Saigon Spice Inc., Saigon Brasserie Inc., Saigon West Inc., Simon Nget a/k/a Chang S. Nget, Michelle Lu Nget a/k/a Pei Ying Nget, Leana Nget, Richard K. Nget a/k/a Chang Hao Nget, and Sung Truong, Defendants.
CourtU.S. District Court — Southern District of New York

Puerto Rican Defense & Education Fund, Inc., William Ross Miller, Jr., Davis Wright Tremaine LLP, New York, NY, for Plaintiffs.

S. Michael Weisberg, Weisberg & Weisberg, New York, NY, for Defendants.

MEMORANDUM AND ORDER

MICHAEL H. DOLINGER, United States Magistrate Judge.

This lawsuit was filed by thirty-six men who worked during portions of the period from 1999 to 2007 for one or several restaurants in Manhattan known as Saigon Grill. All but one of the plaintiffs served as delivery men for the restaurants, and the remaining plaintiff worked in one of the restaurants as a delivery packer. (JPTO 10 at ¶ 25). They sue four corporations that, on paper, owned one or all of the Saigon Grill restaurants; the conceded owner of the restaurants, Simon Nget; his wife, Michelle Nget; and two other individuals—Leana Nget (Simon's sister) and Sung Truong—who plaintiffs allege had some managerial responsibilities at the various restaurants.1

Plaintiffs' Claims

Plaintiffs all assert claims for denial of minimum wages and overtime under the Fair Labor Standards Act, 29 U.S.C. §§ 206 & 207(a)(1). As an accompaniment to their minimum-wage and overtime claims, they also allege that they were victimized by unlawful deductions from their wages in the form of "fines" and kickbacks to defendants, 29 C.F.R. § 531.35, and that they are entitled to reimbursement for the expenses of their bicycles and motorcycles, which they characterize as tools of their trade. Id. Finally, some press claims for retaliatory termination, in violation of 29 U.S.C. § 215(a)(3).

Plaintiffs assert a parallel set of claims under New York law. Thus they complain that defendants violated their rights to a minimum wage and overtime under N.Y. Labor Law §§ 652(4), 650 and N.Y.C.R.R. tit. 12, §§ 137-1.3 & 1.4. They further assert claims for unlawful deductions under N.Y. Labor Law §§ 193, 198-b, and seek "tools of the trade" reimbursement under N.Y.C.R.R. tit. 12, § 137-2.5. In addition, they assert a claim for "spread of hours" compensation under N.Y.C.R.R. tit. 12, §§ 137-1.7, 142-2.4, for workdays on which the time between the start and end of their work exceeded ten hours. Finally, some of the plaintiffs assert a claim under N.Y. Labor Law § 215 for retaliatory termination.

For relief under federal law, plaintiffs seek compensatory and liquidated damages for denial of minimum wage and overtime, attorneys fees and costs, as well as punitive damages for the retaliation claim.2 29 U.S.C. §§ 216(b), 215(a)(3).3 Under state law they seek equivalent forms of relief as well as "spread of hours" compensation. See N.Y. Labor Law §§ 198, 215.

Trial Proceedings

We conducted a trial on all issues except for damages accruing because of alleged retaliatory terminations. As to that issue, at plaintiffs' suggestion, we deferred any hearing until a date to be set after the trial on all other issues. (Tr. 5).

Trial commenced on June 23, 2008, and ended on June 27, 2008. Post-trial briefing was invited and received from both sides. On the basis of the record before me, which includes live testimony at trial, affidavit testimony from most of the plaintiffs and documentary evidence, I make the following findings.

The Facts

Simon Nget is a Cambodian refugee, who entered this country as a teenager. (Tr. 342). He graduated from high school and attended at least 3 semesters of college. (Tr. 342, 381). He worked for a period of years as a packer, a waiter's helper and then a waiter in New York City. (Tr. 343). In about 1991 he opened his first food establishment, a coffee shop in Astoria, Queens. (Tr. 343-44). In January 1996 he opened his first full-scale restaurant, named Saigon Grill, at Broadway and 87th Street. (Tr. 344; JPTO 9 at ¶ 11). In March 1999, he opened a second restaurant, also named Saigon Grill, on Second Avenue and 88th Street (the "East Side" Saigon Grill). (Tr. 344; JPTO 8 at ¶ 5). In August 2001, because of the success of the Broadway Saigon Grill, he moved the location of that restaurant to a larger site at Amsterdam Avenue and 90th Street, allowing him to expand substantially the seating capacity of the restaurant. (Tr. 344, 383; JPTO 9 at ¶ 14). As for the East Side Saigon Grill, he closed it in July 2006 and reopened that restaurant at a larger location on University Place and 12th Street (the "University Place" Saigon Grill). (Tr. 344-45; JPTO 8 at ¶ 8).

Simon Nget owned these various restaurants through a network of corporations that he and his wife, Michelle Nget, incorporated and controlled.4 He and his wife directly managed the operations of the restaurants, including hiring and firing of staff, determination as to compensation, and on-site supervision of operations and staff performance.5 Since these two defendants owned two restaurants at all times during the relevant period, they also called upon several others to assist in performing managerial functions. In particular, a friend of Simon Nget named Sung Truong, who was known to restaurant employees as "Tony" (Tr. 432), was assigned to oversee the operations of the East Side Saigon Grill from February 2002 until it closed in July 2006, and has since served in the same capacity at its replacement location on University Place. (Tr. 433-34). It does not appear that Sung Truong had responsibility to set pay, though he did hire and occasionally fire staff.6 He closely supervised the performance of employees at his location and was in any event in a position to influence decisions as to hiring and firing.7 In addition, Simon Nget's sister, Leana Nget, performed some limited managerial functions for portions of the day at the West Side Saigon Grill, including assigning some miscellaneous tasks to the deliverymen when they were not out delivering and overseeing the delivery operations.8

Simon Nget spent the majority of his time at the West Side Saigon Grill, although he also traveled on a regular basis to the other Saigon Grill location to review the books, discuss staff issues with Sung Truong and deliver cash for payment of wages.9 Michelle Nget stayed mostly at the West Side Saigon Grill, supervising staff, overseeing the efficient processing of telephoned delivery orders and checking on food quality and performance in the kitchen.10

The hiring and firing of staff was principally the responsibility of both Simon and Michelle Nget. Virtually all of the plaintiffs reported that when they went to apply for a job they met with either Simon or Michelle, who hired them on the spot.11 The Ngets also were responsible for setting compensation for employees and deciding other financial issues related to employee compensation, as well as imposing penalties on employees for perceived infractions of restaurant rules.12 Moreover, we infer that they conferred with each other on such matters—including the firing of employees—when the issue was important. (See, e.g., Tr. 66, 122; PX 21 ¶ 24; PX 45 ¶ 30).

A significant part of the business of Saigon Grill at all locations involved deliv-' ery of food orders telephoned to the restaurant. According to Simon Nget, deliveries accounted for an estimated twentyfive percent of revenues at the West Side location and about forty percent at the other location. (S. Nget Dep. 84-85). There is no question that the delivery side of the business was a key element of its success, as many people in mid and lower Manhattan rely on delivery from local restaurants, particularly for their evening meals. Moreover, the Saigon Grill eateries have received public plaudits for rapid and efficient home deliveries. (Tr. 384-85).13

To meet the need to deliver meals to customers' residences or other locations, defendants needed to have available a large coterie of deliverymen. It appears that the West Side 90th Street restaurant had as many as twenty-two delivery men on staff at any one time, and they all worked long hours. (Tr. 402-03). The restaurant opened for business at 11:30 a.m., and remained open until midnight. (JPTO 10 at ¶ 27; Tr. 353). As for the East Side Saigon Grill, it was open from 11:30 a.m. to 11:30 p.m. and the University Place location opens at 11:30 a.m. and closes at midnight. (JPTO 10 at ¶¶ 28-29; Tr. 353). Both of these establishments have utilized about six to ten deliverymen. (Tr. 403).

All thirty-six plaintiffs are Chinese nationals who came to the United States from Fujian province. None had more than a rudimentary education in China, and none is fluent in English. Typically, they have enough knowledge to recognize street signs. It appears that none of the thirty-five deliverymen has worked at any job other than delivering food for restaurants. All reported that they had gotten their job with Saigon Grill after being told by a friend or relative that the restaurant had an opening.14

The hiring process appears to have been quite consistent. Each testifying plaintiff described having been instructed to go to...

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