Citations
- 272 F. Supp. 3d 481
Full opinion text
.OPINION AND ORDER
KATHERINE POLK FAILLA, District Judge:
Plaintiffs Israel Gamero, Norberto Mas-tranzo,- and Oscar Sanchez are former employees of Defendant Koodo Sushi, a Manhattan restaurant. In 2015, Plaintiffs sued Koodo Sushi and its owner, Defendant Michelle Koo (together with Koodo Sushi, “Defendants”), claiming that Defendants had committed wage-and-hour and record-keeping violations of the Fair Labor Standards Act, 29 U.S.C. §§ 201-219 (the “FLSA”), and the New York Labor Law, §§ 190-199A, 650-665 (the “NYLL”). This case proceeded to a bench trial in October 2016. This Opinion constitutes the Court’s Findings of Fact and Conclusions of Law pursuant, to Federal Rule of Civil Procedure 52-.,
The Court has reviewed the transcript of the trial, the trial exhibits, and the parties’ post-trial submissions. And the Court has considered those materials in light of its own recollections of the trial and its perception of the credibility of the witnesses who testified. The Court concludes that Plaintiffs are entitled to relief on seven of their nine claims against Defendants. But the Court also concludes that Plaintiffs may recover only a fraction of the damages they seek — in total, $24,937.12, plus prejudgment interest.
FINDINGS OF FACT
The bulk of the parties’ dispute, as presented at trial, centered on two questions: First, how many hours per week did Plaintiffs work at Koodo Sushi? And second, how much did Koo pay Plaintiffs for their work? Each side answered these questions differently, and the Court found evidentia-ry problems with both Plaintiffs’ and Defendants’ cases.
' Plaintiffs all testified That they worked over 50 hours per week for most of their tenures at Koodo Sushi. (PI. FF ¶¶ 9-10, 22, 35-36). They also claimed that Koo paid them fixed salaries — per shift for Gamero, and per week for Mastranzo and Sanchez — that fell below then-prevailing federal and state minimum wage statutes. (Id. at ¶¶ 12, 24-25, 38-40; PI. CL ¶ 106).
But in general, Plaintiffs’ accounts of their hours and wages did not square with the payroll records Defendants submitted. Relying on those records and Koo’s recollection of how she operated her restaurant, Defendants argued that Plaintiffs had overestimated — and in Gamero’s case, substantially overestimated — their hours. (See Def. FFCL ¶¶ 78-81, 102-03, 105-06, 111, 138, 146, 152, 155-57). Defendants also contended that Koo paid Plaintiffs by the hour, at rates that met or exceeded minimum wage, either in the first instance or once certain credits were deducted. (See id. at ¶¶ 87-88, 107-08, 114-15, 140-43, 148-49).
To be sure, the Court was troubled by many issues with Defendants’ payroll records. Koo inconsistently tracked Plaintiffs’ hours and wages. Some of her records are confusing; some are nearly illegible. But in the main, Defendants’ account of Plaintiffs’ hours and wages was more credible than the accounts Plaintiffs offered. Koo, in addition to evincing genuine concern for her employees’ well-being, was by far the most credible witness at trial, and the Court largely accepted her testimony concerning the accuracy of the records she kept.
Against the backdrop of this global point, the Court will set forth its Findings of Fact. The Court will begin by listing its factual findings concerning Koodo Sushi and its general business practices. The Court will then turn to Koo and discuss how she calculated her employees’ wages, and how she maintained payroll records. Finally, the Court will explain its findings concerning the hours and wages of Sanchez, Mastranzo, and Gamero.
A. Koodo Sushi
Koodo Sushi is a Japanese restaurant located in the Financial District of downtown Manhattan. (JPTO, Joint Stipulation of Fact 2). Its business has declined in recent years: Koodo Sushi recorded $763,389 in gross receipts in the 2013 tax year, $520,242 in the 2014 tax year, and $493,039 in the 2015 tax year. (10/19/16 Stipulation).
During the time Plaintiffs worked at Koodo Sushi — 2009 to 2015 — the restaurant was open to customers from 11:00 a.m. to 3:00 p.m. and 5:00 p.m. to 10:00 p.m. on weekdays, and from 5:00 p.m. to 10:00 p.m. on weekends. (Def FFCL ¶¶ 8, 10; see Tr. 19-20, 177, .320)..From 11:00 a.m. to 3:00 p.m., Koodo Sushi serves lunch; .from 5:00 p.m. to 10:00 p.m., it serves dinner. (Tr 179),
• Most of Koodo Sushi’s luneh customers eat in the restaurant, and- the restaurant usually gets busy between just after noon and 2:00 p.m. (Tr. 179). By contrast, most of Koodo Sushi’s dinner business is delivery; 7:00 p.m. is the busiest part of Koodo Sushi’s dinner shift. (Id. at 179-80). Koo stops accepting dine-in customers at 9:00 p.m., and stops taking delivery orders at 9:50 p.m. (Id. at 186). Usually, Koodo Sushi’s employees leave the restaurant promptly at 10:00 p.m. (Jd at 321-2).
On weekdays from 3:00 p.m. to 5:00 p.m., all Koodo Sushi employees take a “nap break,” although some employees will leave the restaurant to go shopping or attend to personal matters during this period. (Tr. 186-87, 308; see also id. at 31). Koodo Sushi’s “lights are off’ from 3:00 p.m. to 5:00 p.m., and the restaurant is closed for business. (Id. at 187-88, 321). Koodo Sushi employees also enjoy two meal breaks during the day: a mid-day lunch around 2:00 p.m. to 2:30 p.m., and an evening dinner around 8:30 p.m. to 9:00 p.m. (Id: at 179, 182, 308-09). Koodo Sushi provides the food for these meals. (Id. at 309).
B. Koo’s Wage Calculations and Payroll Records
Koo owns Koodo Sushi. (JPTO, Joint Stipulation of Fact 2). And by Koo’s account, she alone is responsible for determining how — and how much — her employees are paid. (Tr. 189).
Even before Plaintiffs filed this lawsuit, Koo had a measure of difficulty carrying out these tasks. In 2008, the New York Department of Labor investigated Koo for spread-of-hours and overtime violations, and Koo ultimately paid a $2,000.00 fine. (Tr, 13, 359-60). As a result of that investigation, Koo learned about several wage- and-hour laws, including New York’s spread-of-hours requirement, and the ability of employers to deduct tip and meal credits from their employees’ wages. (See id. at 188-90, 374-75).
Defendants concede that “Koo’s efforts to comply with” federal and state wage- and-hour “laws may well have been imperfect.” (Tr. 13). The evidence at trial made this plain. Below, the Court explains how Koo calculated her employees’ wages and how she maintained payroll records.
1. Koo’s Wage Calculations
Koo paid her employees on a “weekly or biweekly” schedule. (Tr. 189). She paid all three Plaintiffs by the week, in cash. (Id.). To determine how much her employees were due each week, Koo calculated their hourly wages. (Id.). Thus, her employees’ weekly take-home pay varied depending on how many hours they worked in a given week. (Id. at 189-90). But in general, Koo’s employees earned the same amount of money .week over week, because their schedules were “very fixed.” (Id.).
Koo testified that any Koodo Sushi employee who received minimum wage would be paid at that rate for 40 hours of work per week. (Tr. 193). If a minimum-wage employee worked more than 40 hours in a week, they would be paid time and a half. (Id.). Koo. also deducted a meal credit from her employees’ wages: She testified that the amount of the meal credit was $2.50 in 2008 (as the Department of'Labor investigator explained to Koo), and it later decreased to $1.50. {Id. at 191-92). For each meal break her employees took, Koo would deduct 30 minutes from their daily com-pensable working,.hours, {Id. at 192-93). Koo also deducted a tip credit from certain employees’ hourly wages. {Id. at 190-92).
The actual wages Koodo Sushi’s employees received varied depending on what job thfey fulfilled at the restaurant. Kitchen workers earned minimum wage as a baseline, but Koo would pay them more “based on their technical skill.” (Tr. 190). A kitchen worker whose “job ... required more skill” would thus-earn more “per'hour.” (M; see id. at 391-93 (Koo explaining that she increased Sanchez’s hourly rate when he learned how to prepare a new type of sushi roll)). Koodo Sushi’s dishwashers earned minimum wage. {Id. at 190),' Delivery workers would receive minimum wage, less a tip credit. {Id.). Koo explained that, accounting for meal and tip credits, delivery workers were owed $3.85 per hour, but she paid them $5.00 per hour. (id. at 190-91).
Koodo Sushi accepted delivery orders by phone and through online ordering, and Koo processed the tips her employees earned based on how customers paid those tips. When a customer called in a delivery order and tipped a Koodo Sushi delivery person in cash, that delivery person would take his tip “directly from [the] customer’s hands.” (Tr. 235).- If, instead, a call-in customer paid a tip by credit card — by indicating the amount they wished to tip on their receipt — Koo would pay the employee who made thqt delivery “the exact amount” on the receipt with cash from the register. {Id. at 235-36).
Koo processed tips from online orders differently, Koodo Sushi used two third-party vendors — Delivery.com and Seamless Web (“Seamless”) — to accept ■ online delivery orders. (Tr. 237). Delivery.com would take an unspecified commission from the cost of the meals customers ordered, but not from the tips customers paid Koodo Sushi’s delivery people. {Id. at 238). Thus, if a Koodo Sushi delivery person fulfilled a delivery placed through' Delivery.com, he would receive ¡ the full amount of his tip. {Id. at 386-87). Seamless, in contrast, took an approximately 14% commission “of the money” — including tips — Koodo Sushi derived from orders placed through Seamless.. {Id, at 239). Thus, Koodo Sushi’s delivery , workers would receive the tips that Seamless customers, placed, less Seamless’s 14% commission. {Id.). Koodo Sushi would not “make up the difference.” {Id. at 240).
Because Delivery.com did not take a commission from delivery tips, but Seamless did, Koo offered her employees the option of- not making deliveries placed through Seamless, (Tr. 240-41). On a date Koo could not recall, she wrote a letter extending this offer to her employees, “and every single one” — including Plaintiffs— “signed it.” {Id. at 241). The letter was not introduced into evidence at trial; Koo recalled that the letter explained to her employees the “consequence” of making Seamless deliveries. (Id. at 386-87). The letter was in English, not Spanish. {Id. at 387). None of Koodo Sushi’s employees chose to forego making Seamless deliveries. {Id. at 241). Koo also testified that it was her “regular procedure” to remind her employees that Seamless withheld a portion of delivery tips. (M at 242).
The Court credits Koo’s testimony; that she calculated her employees’ wages by the hour, accounting for minimum wage and applicable credits. But Koo failed to communicate many of her calculations to Plaintiffs. On cross examination, Koo conceded that between 2009 and 2015, she did not give any of her employees Spanish-language employment documents. (Tr. 369-70). Koo also did not give all of her new employees written notices for their own records setting forth their . hourly wages. (Id. at 369; cf. id. at 249-50, 253 (Koo recalling that sometime after she hired Sanchez, a “translator” wrote out for Sanchez “a small list” of Sanchez’s hours and weekly pay in Spanish)). And although Koo would explain to her employees that she was deducting tip and meal credits from their pay, she never committed these explanations to paper. (Id. at 371-73; ■ of. Def. Ex. O (schedule Koo prepared for Sanchez, on which Koo calculated Sanchez’s wages and, wrote “Less Lunch + Dinner Meal”). Koo testified that she tries to stay current with wage-and-hour laws by visiting “the website” (for the New York Department of Labor, the Court inferred) each December. (Tr. 301). While the Court credits Koo’s good intentions, her efforts to comply with those laws have been deficient in several respects.
2. Koo’s Payroll Records
Before explaining the various methods Koo used to track- her employees’ hours and wages, the Court makes two general points. First, there is no single document that sets forth Plaintiffs’ working .hours and wages in full. Instead, the records Defendants introduced at trial were akin to pieces .of a puzzle: Only.by reading them in tandem could the Court discern a coherent (but not totally complete) account of Plaintiffs’ hours and wages. Second, between 2009 and-2015, Koodo Sushi did not have a system employees could, use “to punch in and out” of work. (Tr. 378)., Even today, Koodo Sushi’s employees, do not “sign in when they come” to work or “sign out when they” depart. (Id. at 407).
But although Koo’s payroll records were somewhat haphazard, Koo explained them in a way the Court understood. Koo also delivered a consistent account of the shifts Plaintiffs worked and the wages she paid them. And as a result, Koo demonstrated why her payroll records substantiate Defendants’ arguments about Plaintiffs’ hours and wages;
With these caveats in mind, the Court addresses the five types of payroll records Defendants introduced at trial: (i) login sheets; (ii) delivery login sheets; (iii) Seamless delivery reports; (iv) the Aldelo system;. and (v) Koo’s calendar.
a. Login Sheets
After the New York Department of Labor investigated Koodo Sushi in 2008, Koo began hanging employee login sheets on the wall of the restaurant’s kitchen. (Tr. 195-96; see, e.g., Def. Ex. E). The sheets had spaces for Koodo Sushi’s employees to sign in each morning and sign out each night. (Def. Ex. E, V-17), Koo continued preparing these sheets on a weekly basis through early 201.3, although Koo recalled “a period of time” between 2008 and 2013 when she stopped using these sheets. (Id. at 197-99).
. The login sheets achieved mixed results. Although Koo instructed her employees to sign the login sheets — and threatened-mot.to pay them if they failed to do so — the employees complied irregularly. (See. Tr. 195-96, 198), And sometimes, Koodo Sushi employees would sign in for each other: Mastranzo, for exam- . pie, testified that his co-worker Tito would occasionally fill out Mastranzo’s section of a login sheet “as a joke.” (Id. at 108, 113-15). On cross-examination, Koo “agree[d]” with defense counsel that the login “sheets were not accurate representations of the[ ] hours” Plaintiffs “worked.” (Id. at 383).
Assuming that none of her employees disputed how much they were paid in a given week, Koo would throw away that week’s login sheet. (Tr. 384). Koo did not believe she needed to maintain these records. (Id. at 384-85).
b.Delivery Login Sheets
Koo used a different type of login sheet for delivery employees. (Tr. 291-92; see Def. Ex. A, B, V-l). Koo would print these delivery login sheets each month, “put [them] in a binder,” and place the binder “on [a] table.” (Tr. 291). Koo testified that these sheets displayed the shifts that Koo-do Sushi delivery people worked, and also the wages they received. (Id. at 291-92).
c.Seamless Delivery Reports
Koo also used daily Seamless delivery reports to record payments to her delivery employees. (Tr. 201-02, 242-43). These reports were computerized; Koo would print them out and write on them the names of delivery employees who worked in a given week. (Id. at 242; see Def. Ex. I). So, for example, on a report dated June 26, 2014, Koo wrote “Israel” (for Plaintiff Gamero), then indicated the tips Gamero received from Delivery.com and Seamless orders on Tuesday, Wednesday, Thursday, and Friday of that week. (Tr. 243; Def. Ex. I). And on the right side of this June 26, 2014 report, Koo circled two numbers — “80.16 + 60” — which indicated, respectively, the tips Gamero received and his hourly wages for that week. (Tr. 243-44; Def. FFCL ¶ 64).
d.Aldelo
From 2010 through 2013, Koo recorded her employees’ hours and wages using Al-delo, a computerized payroll system. (Tr. 217-18). Koo’s Aldelo records were by far the most coherent — and helpful — exhibit that Defendants introduced at trial. (See Def. Ex. L).
Each time Koo was ready to pay a Koo-do Sushi employee, Koo (or, if Koo was on vacation, Koodo Sushi employee Zha Wong) would make an entry in Aldelo. (Tr. 218-19). Through Aldelo, Koo would then print (on thermographic paper that, over time, has faded to varying degrees) a pays-tub indicating how much that employee would be receiving. (Id. at 223, 233-34; see Def. Ex. G). Koo made her employees sign these paystubs before she paid them. (Tr. 223; see Def. Ex. G, J). The paystubs were dated in two ways: They indicated (i) the date and time Koo generated the paystub and (ii) the pay period for which the employee signing the paystub was being compensated. (Tr. 223; see Def. Ex. J).
Aldelo generated a global record — the “Pay Out Details Report” — of the payment entries Koo made in the program. (Tr. 230-32, Def. Ex. L). At trial, Defendants introduced a version of the Pay Out Details Report reflecting the payments Koo made to Plaintiffs. (Def. Ex. L). Each line of this document corresponds to an individual paystub Koo generated through Aldelo. (Tr. 223, 232-33; see Def. Ex. L). The Pay Out Details Report has five columns:
i. “Paid To”: This column indicated the name of the employee who received a given paystub and that employee’s role at Koodo Sushi. (Tr. 223). “Israel D” corresponded to Gamero, a delivery worker; “Oska K” signified Sanchez, who worked in the kitchen; and “Rob K” was Mastranzo, who also worked in the kitchen. (Id. at 220-21; see generally Def. Ex. L).
ii. “Date/Time”: This column indicated the date and time that Koo created a paystub. (Tr. 223).
iii. “Amount Paid”:- This column displayed the value of each paystub reflected in the Pay Out Details Report. (Tr. 223).
iv. “Description”: These entries showed the pay period to which a paystub corresponded. (Tr. 223-24). Some of these entries display a range of dates (e.g., “12/31-1/6/13”), while others show a single date (e.g., “9-Jun”). (Def. Ex. L., at 2142-43). Other entries in the Description column read “tips” (to show tips an employee received) or “extra” (for “extra performance” payments Koo gave her employees when they completed an “extra job”). (Tr. 225).
v. “Paid By”: Finally, the Pay Out Details Report’s fifth column showed which Koodo Sushi employee generated the paystubs reflected in the report; in almost every case, this was Koo. (Tr. 224; see Def. Ex. L).
Koo explained that the Pay Out Details Report is the best source of information about the wages she paid her employees between 2009 and 2013. (Tr. 233). The Court agrees.
e. Koo’s Calendar:
In late 2013 or early 2014, Koo stopped using Aldelo and instead began recording some of her employees’ shifts and wages in a calendar. (Tr. 209, 213, 217; Def. Ex. K). Entries for payments Koo made to Sanchez and Mastranzo (but not Gamero) appear throughout the calendar. (Id. at 210; see generally Def. Ex. K).
An example from the calendar helps explain how Koo used it. In a box dated January 12, 2014, the name “Rob” (for Mastranzo) appears; next to “Rob,” Koo wrote “400,” which indicates how much Koo paid Mastranzo for the work he performed in the preceding week (January 6 through January 12). (Tr. 210-11; Def. Ex. K, at 2157). In this same box, Koo also wrote “Oska” (for Sanchez”) and “1/10,” which indicates that Koo paid Sanchez on January 10. (Tr. 210; Def. Ex. K, at 2157). The Aldelo Pay Out Details Report states that Koo paid Sanchez $556.65 on that date. (Def. Ex. L, at 2145). In other calendar entries — April 20, 2014, for example— Koo wrote a date next to “Oska” (“4/17”), and the amount Sanchez was paid on that date ($550.00) appears in the April 17,2014 calendar entry. (Def. Ex. K, at 2162).
Many early 2014 calendar entries also indicate the shifts (and, by extension, the number of hours) that Sanchez and Mas-tranzo worked in a given day. On January 8,2014, for example, Koo wrote “11-3” and “5-10” next to “Oska” and the same numbers next to “Rob.” (Def. Ex. K, at 2157). But Koo abandoned this practice over time; instead, she used the calendar to keep track of when her employees deviated from their normal work schedules. (Tr. 214-15). Koo explained that she stopped recording her employees’ daily schedules on the calendar because (more glibly) she “was lazy” and (less glibly) she “was working so long.” (Id. at 213-14).
3. Plaintiffs’ Hours and Wages
One major takeaway of the trial was that Koo paid her employees by the hour. (Tr. 189). As a . result, Plaintiffs’ wages varied depending on how many hours they worked per week. Below is a general summary of Plaintiffs’ hours and wages; the Court will consider these figures at a more granular level when it calculates .Plaintiffs’ damages in the Conclusions of Law section of this .Opinion.
a.Sanchez
Sanchez worked at Koodo' Sushi from August 2009 through February 2015. (Tr. 15-16; see id. at 245, Def. FFQL ¶ 136). For his first month of employment, Sanchez was á dishwasher and delivered food. (Tr. 22). Then, Koo' asked Sanchez if he “wanted to learn how to prepare sushi,” and Sanchez said he did. (Id. at 22, 245). Sanchez continued working as a sushi chef until he left Koodo Sushi. (Id. at 24). •
• For most of his employment at Koodo Sushi, Sanchez worked the same schedule: 11:00 a,m. to 3:00 p.m. and 5:00 p.m. to 10:00 p.m. on weekdays, and 5:00 p.m. to 10:00 p.m. on one weekend day. (Def. FFCL ¶¶ 138, 146; Tr. 23-24). Between December 2014 and February 2015, Sanchez worked