PAMELA K. CHEN, District Judge:
Plaintiff Onyenaemeka Ethelberth ("Ethelberth") initiated this suit against his former employer, Defendants Choice Security Company, Choice Group, Inc., Choice Security Services, Inc., Choice Security Services, Choice Security Co. (collectively, "Choice"), and Choice's president, George Omogun, to recover unpaid wages and overtime compensation. Ethelberth, who formerly worked as an unarmed security guard for Choice, asserts that Defendants failed to pay him overtime compensation in violation of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., and the New York Labor Law ("NYLL"), N.Y. Lab. Law § 650 et seq. Ethelberth also asserts claims based on Defendants' alleged underpayment of his "straight time" (non-overtime) compensation, pursuant to NYLL § 190 et seq.
Defendants move for summary judgment on all claims in the Amended Complaint, asserting that (i) any "overtime" hours worked by Ethelberth were performed as an independent contractor for Choice; (ii) Defendant Omogun cannot be held individually liable as an employer; (iii) Defendants are not covered employers under the FLSA; (iv) the FLSA's statute of limitations bars Ethelberth's claim; (v) Ethelberth's breach of contract and unjust enrichment claims are duplicative of his claims under the FLSA and the NYLL; (vi) Ethelberth failed to exhaust his administrative remedies and cannot bring a claim for "prevailing wages" under the NYLL; and (vii) in the event Ethelberth's FLSA claims are dismissed, the Court should decline to exercise supplemental jurisdiction over his State law claims, as to which there is also no diversity jurisdiction. (Dkt. 62 (Defendants' Motion for Summary Judgment)).
Ethelberth opposes Defendants' motion and cross-moves for summary judgment as to Defendants' liability under the FLSA, NYLL and common law. Ethelberth asserts that: (i) all hours worked by Ethelberth for Choice were as a Choice employee and not as an independent contractor; (ii) Omogun may be held individually liable as an employer; (iii) Defendants qualify for enterprise coverage under the FLSA; (iv) Defendants' violation of the FLSA was willful, thereby extending the statute of limitations from two to three years; (v) Ethelberth's breach of contract and unjust enrichment claims are not duplicative; (vi) Ethelberth's breach of contract claim for prevailing wages provided for by NYLL § 220
For the reasons set forth below, the Court grants, in part, and denies, in part, the pending motions. The Court grants summary judgment to Ethelberth on the following issues relevant to Defendants' liability under the FLSA: the Court determines that Ethelberth was not an independent contractor when working for Choice, and that Omogun may be held individually liable as an employer. With respect to coverage under the FLSA, the Court grants summary judgment to Defendants on the issue of individual coverage, finding that Ethelberth has failed to establish that he is individually covered as an employee. The Court finds that a genuine issue of material fact exists as to Choice's coverage under the FLSA, and so denies summary judgment to both parties on Count Four of the Amended Complaint.
Defendants Choice Security Company, Choice Group, Inc., Choice Security Services, Inc., Choice Security Services, Choice Security Co. (collectively, "Choice") provide unarmed security guards to their customers. (Dkt. 84 (Affidavit of George Omogun in Opposition to Plaintiff's Motion for Summary Judgment ("Omogun Aff.")), ¶ 2).
Defendant George Omogun ("Omogun") is the president of Choice. (Omogun Aff., ¶ 1). At all times relevant to this action, he signed Choice's tax returns (Pl. 56.1, ¶ 16), and also paychecks for Choice's security guards (Pl. Ex. 11). He had authority to hire and fire employees (Pl. 56.1, ¶ 14), and set employee compensation (Pl. 56.1, ¶ 15). He had control over Choice's bank account and made personal purchases from it, which Defendants aver did not relate to the business of Choice. (Pl. 56.1, ¶ 17; Defs. 56.1 Opp., ¶ 17).
Choice hired Ethelberth as an unarmed security guard in December 2007. (Pl. 56.1, ¶ 20). He worked for Choice through June 2010. (Pl. 56.1, ¶ 21).
Work at SCA sites. Ethelberth worked up to 40 hours per week at SCA sites. (Pl. 56.1, ¶¶ 24-25; Ethelberth Aff., ¶¶ 5-6). He avers that he generally worked weekdays at SCA sites between the hours of 7:00 a.m. and 3:00 p.m. (Id.) Choice does not dispute that Ethelberth performed this work as Choice's employee. (Defs. 56.1 Opp., ¶ 41).
Choice paid Ethelberth on an hourly basis. (Pl. 56.1, ¶ 26). The parties agree that the wages Ethelberth received fluctuated. (Pl. 56.1 Opp., ¶ 14). Choice avers that the wages fluctuated based on Choice's contract for the project site, and that Ethelberth received wages for his work at SCA sites ranging from $8 to $16.61 per hour. (Defs. 56.1, ¶ 14; Defs. 56.1 Opp., ¶ 39.) Ethelberth avers that Choice orally agreed to pay him at prevailing wage rates,
Ethelberth received his pay for his work at SCA job sites through Choice's payroll vendor, Paychex, on a bi-weekly basis and received a W-2 form for each year of his employment. (Defs. 56.1, ¶ 21; Pl. 56.1 Opp., ¶ 21; Omogun Aff., ¶ 34). Ethelberth's bi-weekly paycheck through Paychex never accounted for more than 80 hours over a two-week period. (Ethelberth Aff., ¶ 9).
Work at non-SCA sites. Ethelberth worked up to 20 hours per week at non-SCA sites, generally performing his work on weekday evenings and some weekends. (Pl. 56.1, ¶¶ 24-25; Dkt. 50 (Affidavit of Onyenaemeka Ethelberth ("Ethelberth Aff.")), ¶¶ 5-6). Ethelberth contends that he performed this work as a Choice employee. (Pl. 56.1, ¶¶ 27-28). Defendants, however, maintain that Ethelberth was an independent contractor when performing this work, based on Ethelberth's own agreement with Choice's operations manager, Perry Onah ("Onah"). (Defs. 56.1 Opp., ¶ 58; Omogun Aff., ¶¶ 19-20). According to Defendants, Ethelberth sought extra work at non-SCA sites as an independent contractor and agreed to be paid for such work outside of Choice's normal payroll and without any statutory deductions. (Omogun Aff., ¶ 21; Defs. 56.1 Opp., ¶ 58). As a result of this arrangement, Omogun directed Choice's operations manager, Onah, to issue IRS Form 1099s
It is undisputed that Ethelberth did not receive wages at one and one-half times his normal wage rate for hours he worked above 40 hours a week, which generally occurred at non-SCA sites, but also included some SCA sites. (Pl. 56.1, ¶¶ 22-25). Ethelberth avers that Choice paid him at an hourly wage rate that varied between $8.00 and $13.00. (Pl. 56.1, ¶¶ 69-81). Choice avers that they had a policy prohibiting overtime work by their guards, but Ethelberth maintains that Defendants required him to work overtime. (Defs. 56.1, ¶ 20; Pl. 56.1 Opp., ¶ 20).
Although there is no dispute that Choice provided Ethelberth a uniform to wear while performing his duties regardless of the job site (Defs. 56.1, ¶ 13), the parties disagree about the uniform's origins: Defendants claim that the uniform was both manufactured, and purchased from a store, in Long Island City, New York (id.),
Ethelberth filed his complaint against Choice and Omogun on September 28, 2012. (Dkt. 1). On March 29, 2013, Ethelberth filed an Amended Complaint. (Dkt. 17). On March 14, 2014, Defendants moved for summary judgment on all claims, and Ethelberth cross-moved for summary judgment as to Defendants' liability under the FLSA, NYLL, and common law.
Summary judgment is proper only where, construing the evidence in the light most favorable to the non-movant, "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); see also Redd v. N.Y. Div. of Parole, 678 F.3d 166, 173-74 (2d Cir.2012). A dispute is "genuine" when "the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is material within the meaning of Rule 56 where it "might affect the outcome of the suit under the governing law." Id. In determining whether there
This standard imposes the initial burden on the moving party to demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has met this burden, the party opposing summary judgment must identify specific facts and affirmative evidence that contradict those offered by the moving party to demonstrate that there is a genuine issue for trial. Id. at 324, 106 S.Ct. 2548; see also Anderson, 477 U.S. at 256-57, 106 S.Ct. 2505. The non-moving party "may not rely on mere conclusory allegations nor speculation, but instead must offer some hard evidence showing that [their] version of the events is not wholly fanciful." D'Amico v. City of N.Y., 132 F.3d 145, 149 (2d Cir.1998) (collecting cases). "Summary judgment is appropriate only `[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party.'" Donnelly v. Greenburgh Cent. Sch. Dist. No. 7, 691 F.3d 134, 141 (2d Cir.2012) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).)
The same standard of review applies when the Court is faced with cross-motions for summary judgment, as here. See Lauria v. Heffernan, 607 F.Supp.2d 403, 407 (E.D.N.Y.2009) (citations omitted). When evaluating cross-motions for summary judgment, the Court reviews each party's motion on its own merits, and draws all reasonable inferences against the party whose motion is under consideration. Morales v. Quintel Entm't, Inc., 249 F.3d 115, 121 (2d Cir.2001).
Ethelberth claims that Defendants violated the FLSA by failing to pay him overtime when he worked more than 40 hours a week. (Am. Compl., ¶¶ 56-66).
Defendants contend that any "overtime" hours Ethelberth worked were performed as an independent contractor. (Dkt. 69 (Defendants' Memo in Support of Summary Judgment ("Defs. MSJ Memo")) at ECF 17). Ethelberth argues that any work he performed for Defendants was as a
The FLSA contains a broad definition for "employees," in accordance with the Act's remedial purpose. It defines "employee" as "any individual employed by an employer" and to "employ" as including "to suffer or permit to work." 29 U.S.C. §§ 203(e)(1); 203(g). It does not contain a definition for independent contractors. Notably, an employer's classification of a worker as an "independent contractor" is not controlling. Brock v. Superior Care, Inc., 840 F.2d 1054, 1059 (2d Cir.1988).
In the absence of a statutory definition for independent contractors, courts use an "economic reality test" to determine whether an individual is an independent contractor. See Brock, 840 F.2d at 1058-59 (noting the test allows courts to judge whether, "as a matter of economic reality, the workers depend upon someone else's business for the opportunity to render service or are in business for themselves."). Under the economic reality test, courts consider the following non-exclusive factors: (1) the degree of control the employer exercises over the workers, (2) the workers' opportunity for profit or loss and their investment in the employer's business, (3) the degree of skill and independent initiative required to perform the work, (4) the permanence or duration of the working relationship between the employer and employee, and (5) the extent to which the work is an integral part of the employer's business. Id. at 1058-59. No single factor is dispositive; the court's analysis is based on the totality of the circumstances. Id. at 1059. The existence and degree of each factor are considered questions of fact, while the ultimate determination regarding a plaintiff's status as an employee or independent contractor is a question of law. Id. at 1059.
The Court thus examines whether, as a matter of economic reality, Ethelberth's "overtime" work was performed as an employee or an independent contractor for Choice. See Thomas v. City of Hudson, No. 95-CV-0070, 1996 WL 280828 (N.D.N.Y.1996) (conducting economic reality analysis to determine whether the plaintiffs' overtime work was done as independent contractors or employees). Because Ethelberth's "overtime" work was largely performed at non-SCA sites, and Choice does not dispute that Ethelberth's work at SCA sites was performed as their employee, the Court limits its analysis to work performed at non-SCA sites. Based on an analysis of the foregoing factors, the Court finds that there is no genuine issue of material fact as to Ethelberth's status as Choice's employee at the time he worked at the non-SCA sites, which thus constituted overtime work he performed for Choice.
Defendants' degree of control over employees. The record shows that the Defendants exercised a substantial degree of control over Ethelberth when he was working at non-SCA job sites. While Brock makes clear that an employer "does not need to look over his workers' shoulders every day in order to exercise control," Brock, 840 F.2d at 1060, the record here shows that the Defendants essentially did just that with respect to Ethelberth's work at non-SCA job sites. Defendants
Plaintiff's opportunity for independent profit/loss and his investment in Defendants' business. The record also shows that Ethelberth did not have any independent opportunity for profit or loss, nor have any investment in Choice's business, with respect to Ethelberth's work at non-SCA job sites. Choice negotiated the vendor contract for each non-SCA site, and paid their security guards at varied rates depending on the site. (Omogun Aff., ¶¶ 16-17). Choice informed the guards of the applicable rate to each site. (Omogun Aff., ¶ 17). Choice also purchased uniforms for their security guards to wear at both the SCA and non-SCA sites (Defs. 56.1, ¶ 13; Pl. 56.1 Opp., ¶ 13). This factor, therefore, also favors a finding that Ethelberth was an employee of Choice with respect to the work he performed at the non-SCA work sites. See Ansoumana, 255 F.Supp.2d at 191 (finding the fact that the delivery workers were not required to make any up-front investment to perform their duties weighed in favor of finding an employment relationship); Thomas, 1996 WL 280828 at *8 (finding plaintiffs' opportunities for profit and loss from their business to be minimal, therefore supporting an employment relationship).
Degree of skill/independent initiative. The third factor also weighs in favor of finding an employment relationship between Ethelberth and Choice with respect to his work at non-SCA job sites. As part of his non-SCA work, Ethelberth served as an unarmed guard "act[ing] as [a] doorm[a]n ... to observe and watch for security related issues" at businesses such as fast-food restaurants. (Omogun Aff., ¶ 8; Pl. 56.1, ¶¶ 21, 23; Defs. 56.1 Opp., ¶¶ 21, 23). These duties do not require specialized skills or a high degree of independent initiative. See Gustafson v. Bell Atl. Corp., 171 F.Supp.2d 311, 326 (S.D.N.Y.2001) (determining that the plaintiff's duties as a chauffeur required no specialized skill or initiative, thus suggesting that plaintiff was an employee).
Permanence, duration of working relationship. The record shows that Ethelberth worked for Choice, on essentially a full-time basis, from his hiring in December 2007 through June 2010. (Pl. 56.1, ¶ 21; Pl. Ex. 35). Because Ethelberth's employment with Choice clearly was not of a transient nature, this factor similarly favors a finding that Ethelberth was an
Extent to which work is an integral part of the business. The final factor examines the extent to which the work performed by the plaintiff is integral to the defendants' business. Ansoumana, 255 F.Supp.2d at 191-92 (finding delivery workers were engaged in the defendants' primary business, which was providing delivery services to retail establishment). Here, there is no dispute that the worked performed by Ethelberth as a security guard at the non-SCA job sites was integral to Choice's primary business of providing security services to their commercial clients. Thus, the final factor also favors finding an employer-employee relationship between Ethelberth and Choice with respect to his non-SCA work.
Based on the Court's analysis under the "economic reality" test, it is clear that Ethelberth depended upon Choice "for the opportunity to sell [his] labor and [was] not in any real sense in business for [himself.]" Ansoumana, 255 F.Supp.2d at 192. All five factors weigh in favor of finding an employer-employee relationship between Ethelberth and Choice with respect to his duties at non-SCA job sites. Accordingly, the Court finds as a matter of law that Ethelberth was Choice's employee during the entirety of his working relationship with Choice, whether he was performing his duties at a school construction site or a fast-food restaurant.
The parties also seek a determination about whether Omogun, the president and sole owner of Choice, may be held liable as an employer under the FLSA. Defendants argue that Omogun does not exercise substantial or operational control over Choice's security guards; rather, during Ethelberth's employment, decisions regarding hiring, termination, pay rates, work assignments and schedules were made by Choice's operations manager, Onah. (Defs. MSJ Memo at ECF 25). Ethelberth argues that Omogun, in fact, exercises operational control over Choice's security guards, and therefore qualifies as an employer. (Pl. Opp. at ECF 33; Pl. MSJ Memo at ECF 25-26).
To be held liable as an employer under FLSA, "an individual defendant must possess control over a company's actual `operations' in a manner that relates to a plaintiff's employment." Irizarry v. Catsimatidis, 722 F.3d 99, 109 (2d Cir. 2013). To determine whether an individual exercises operational control in relation to the plaintiff's employment, the Court examines whether the individual exercised authority over management, supervision, and oversight of the employer's affairs in general, as well as evidence under the Carter framework that reflect the individual's exercise of direct control over the plaintiff-employees. See Irizarry, 722 F.3d at 104-05 (citing Carter v. Dutchess Community College, 735 F.2d 8 (2d Cir. 1984)); id. at 111. The Carter framework includes the following four non-exclusive and overlapping factors: "whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records." Id. at 105 (citing Carter). The Court makes it determination based on the totality of the circumstances. Id. at 116.
Contrary to Defendants' assertions (Defs. 56.1, ¶ 28; Omogun Aff., ¶ 13), the record clearly shows that Omogun "exercised authority over management, supervision, and oversight of the employer's affairs in general." See Irizarry, 722 F.3d at 111. There is no dispute that Omogun
The evidence also establishes the second factor in the Carter framework. Though claiming that he did not set Ethelberth's work schedule, Omogun testified in his deposition that he did not let employees work more than 40 hours a week. (Pl. 56.1, ¶ 62) (emphasis added). Omogun also admits that upon learning that Ethelberth was working more than 40 hours a week, he instructed a Choice employee to issue a Form 1099 to Ethelberth (Omogun Aff., ¶ 22).
Omogun also admits that he set the compensation rates and amounts for Choice employees, thereby establishing the third Carter factor, i.e., that Omogun "determined the rate and method of payment." (Pl. 56.1, ¶ 15). The fact that Omogun signed employee paychecks reinforces this conclusion. (Pl. Ex. 11); see also Irizarry, 722 F.3d at 115 (noting the individual defendant's signature on paychecks, while not dispositive, supported a finding against the defendant on the third Carter factor).
Lastly, the record does not speak to the fourth Carter factor, i.e., whether Omogun "maintained employment records." Nevertheless, the other Carter factors unequivocally establish that Omogun exercised sufficient operational control over Choice's employees during Ethelberth's employment. Taken together with Omogun's general authority over Choice's affairs, the totality of the circumstances establishes that Omogun may be held liable as an employer under the FLSA. The Court therefore denies summary judgment to Defendants and grants summary judgment to Plaintiff on this issue.
The Court now turns to the issue of whether Defendants were "engaged in interstate commerce" as required by the FLSA. 29 U.S.C. § 207. Upon review of the parties' submissions, the Court determines that genuine issues of material fact exist, precluding summary judgment on this issue.
Engagement in interstate commerce, either by an employee or by the employer as a whole, is a prerequisite for liability for the FLSA's overtime requirement. A plaintiff may satisfy this requirement by showing "individual coverage" through his personal engagement in interstate commerce or "enterprise coverage" through the employer's engagement in interstate commerce. Rodriguez v. Almighty Cleaning, Inc., 784 F.Supp.2d 114,
First, Defendants argue that Ethelberth does not qualify for individual coverage under FLSA. Second, the parties both seek a determination regarding Choice's coverage as an enterprise under FLSA. The Court examines each of these arguments below.
Individual Coverage. A plaintiff can invoke "individual coverage" under the FLSA if he was "engaged in the production of goods for commerce" or otherwise "engaged in commerce." Because Ethelberth's duties were limited to providing security services and occasional cleaning, he cannot claim to have been involved in the production of goods for commerce. Thus, Ethelberth can only claim individual coverage under the FLSA on the basis of being "engaged in commerce" while employed at Choice.
To be "engaged in commerce," the employee must perform work "involving or related to the movement of persons or things (whether tangibles or intangibles, and including information and intelligence) among the several States or between any State and any place outside thereof." 29 C.F.R. § 779.103 (emphasis added). The plaintiff must work "in the channels" of "interstate or foreign commerce," or "in activities so closely related to this commerce, as to be considered a part of it," e.g., "regular[] use [of] the mails, telephone or telegraph for interstate communication"; "regular[] travel across State lines while working." Id. (emphasis added). Activities that simply "affect or indirectly relate to interstate commerce" are insufficient. McLeod v. Threlkeld, 319 U.S. 491, 497, 63 S.Ct. 1248, 87 L.Ed. 1538 (1943). As a basic rule, "if [the plaintiff] did not have any contact with out-of-state customers or businesses, he cannot be individually covered under the FLSA." Li v. Cheng, No. 10-CV-4664, 2012 WL 1004852, at *4 (E.D.N.Y. Mar. 23, 2012).
Defendants claim that Ethelberth has not met his burden to show that he was an "employee engaged in the production of goods for commerce" or otherwise "engaged in commerce." (Defs. MSJ Memo at ECF 22). Defendants point to Ethelberth's testimony that his job duties were to patrol project sites and safeguard the equipment and materials thereon. (Id.) Ethelberth counters that, at these sites, he guarded tools, equipment, and supplies that had been manufactured out of state and overseas. (Pl. Opp. Memo at ECF 30-31).
While Ethelberth might be able to establish individual coverage by showing that these supplies and equipment were shipped to or from overseas or out-of-state destinations during his work shifts, Ethelberth has offered no such evidence. Instead, he relies solely on his own general statements that he guarded over items that were made outside of New York. This is insufficient to create a genuine issue of material fact. See Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548 (party opposing summary judgment must identify specific facts and affirmative evidence that contradict those offered by the moving party to demonstrate that there is a genuine issue for trial); D'Amico, 132 F.3d at 149 (non-moving party "may not rely on mere conclusory allegations nor speculation, but instead must offer some hard evidence showing that [their] version of the events is not wholly fanciful"); Boekemeier v. Fourth Universalist Soc'y in City of New York, 86 F.Supp.2d 280,
Enterprise Coverage. The parties both seek summary judgment on the issue of whether Choice is subject to the FLSA through enterprise coverage. The standard for enterprise coverage under the FLSA is broader than that of individual coverage. An employer is subject to enterprise coverage if its "annual gross volume of sales made or business done is not less than $500,000" and it "has employees engaged in commerce or ... [the] handling, selling or otherwise working on goods or materials that have been moved in or produced for commerce by any person." 29 U.S.C. § 203(s)(1)(A).
"Enterprise coverage has been interpreted broadly by the courts." Boekemeier, 86 F.Supp.2d at 285. So long as the employer achieves an annual gross business volume of $500,000 or more, "all of the employer's employees are covered under [FLSA] as long as at least some handle, sell, or otherwise work on goods or materials that have been moved in or produced for commerce." Jones v. E. Brooklyn Security Services Corp., No. 11-CV-1021, 2012 WL 3235784, at *4 (E.D.N.Y. Aug. 7, 2012) (quoting 29 U.S.C. § 203(s)(1)(A)). Courts have found this element satisfied where employees "merely handled supplies or equipment that originated out-of-state." Rodriguez, 784 F.Supp.2d at 121. Enterprise coverage "applies so long as some of the employees wear uniforms or use items such as radios, books, flashlights, clipboards, brooms, bags, and cleaning supplies that have moved in interstate commerce." Jones, 2012 WL 3235784, at *4 (citing Rodriguez, 784 F.Supp.2d at 121 (listing cases); Archie v. Grand Cent. P'ship, 997 F.Supp. 504, 531-32 (S.D.N.Y.1998) (listing cases)).
Choice does not dispute that they achieved an annual gross business volume of $500,000 or more, but does dispute that their employees handled goods or items that moved in interstate commerce. Choice maintains that their employees did not handle any goods or items produced outside the State of New York. (Omogun Aff., ¶ 11; Defs. 56.1, ¶¶ 12-13, 24(b)). Choice also argues that the uniforms worn by their guards were purchased and manufactured in New York. (Omogun Aff., ¶ 11; Defs. 56.1, ¶ 13).
Ethelberth also points to bank transactions from Choice's account showing a number of out-of-state purchases. (Pl. 56.1, ¶ 9; Pl. Ex. 41). Choice maintains that any out-of-state purchases were for Omogun's personal use and were not connected to Choice's provision of security guard services. (Defs. 56.1 Opp., ¶ 9; Omogun Aff., ¶ 39). However, the nature of these out-of-state purchases is, again, a genuinely disputed issue of material fact that should be resolved by a jury.
In sum, because a reasonable juror could find either for Ethelberth or Choice on the foregoing material factual issues, the Court denies summary judgment to both parties on the issue of Choice's enterprise coverage under the FLSA.
The parties have also cross-moved for a finding on the statute of limitations applicable to Ethelberth's FLSA claim.
The applicable statute of limitations is based on a factual determination regarding Choice's knowledge or reckless disregard of the fact that they were legally required to pay overtime to Ethelberth for the work he performed beyond 40 hours each week. See McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133, 135, 108 S.Ct. 1677, 100 L.Ed.2d 115 (1988) (establishing that willfulness, for purposes of applying FLSA's three-year statute of limitation, requires that "the employer knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute"); Young v. Cooper Cameron, 586 F.3d 201, 207 (2d Cir.2009) (applying McLaughlin "willfulness" standard); Eschmann v. White Plains Crane Service, Inc., 11-CV-5881, 2014 WL 1224247, at *5 (Mar. 24, 2014 E.D.N.Y.) ("district courts in this circuit have generally left the question of willfulness to the trier of fact.... When courts have decided the question of willfulness at the summary judgment stage, either the `FLSA violation was due to a misclassification of the plaintiff as being exempt,' or there existed no genuine dispute that the employer had been on notice that it was subject to the FLSA.") (citations omitted). Whether that factual determination is made at the summary judgment phase or at trial depends on whether there are disputed material facts regarding at least two issues: (1) Choice's obligation to pay Ethelberth overtime under the FLSA, and if so, (2) Choice's knowledge
As the Court previously found, there are material facts in dispute about Choice's enterprise coverage under the FLSA, which may be dispositive of the first issue and this action, i.e., whether Choice is covered by, and obligated to pay overtime under, the FLSA.
Ethelberth moves for summary judgment on Counts Two and Three of the Amended Complaint.
Depending upon the nature of a plaintiff's claim under the NYLL, he or she may not be required to exhaust administrative remedies before bringing suit for unpaid wages. For claims brought pursuant to Article 6 of the NYLL, exhaustion is not required. See NYLL § 198(3) ("Investigation by the commissioner will not be a prerequisite to nor a bar against a person bringing a civil action under this section"). Nor is exhaustion required before bringing a claim for unpaid wages and overtime pursuant to the New York Minimum Wage Act. See NYLL § 663(1) (recognizing private right of action). However, Article 8 of the NYLL, which applies to public works projects, requires an employee to exhaust administrative remedies before bringing a private right of action. NYLL § 220(8); see Igene v. Miracle Sec., Inc., No. 12-CV-149, 2013 WL 5502868, at *3 (E.D.N.Y. Oct. 2, 2013) (noting plaintiff's claim under NYLL § 220 required exhaustion of administrative remedies).
Count Two of the Amended Complaint purports to assert claims under Article 6 of the NYLL, NYLL § 190 et seq., for unpaid wages, but Ethelberth's moving papers reveal that Count Two is, in fact, based on the prevailing wage provision set forth in Article 8 of the NYLL, NYLL § 220. (See Pl. MSJ Memo at ECF 29-30; Pl. 56.1, ¶ 32 (citing NYLL § 220)).
As noted above, before bringing a claim to recover wages at the prevailing wage pursuant to NYLL § 220, exhaustion of administrative remedies is required. The administrative process begins with the filing of an administrative complaint with the relevant fiscal officer, who then conducts an investigation and subsequently determines whether wages are due on the employee's claim. See Brown v. Tomcat Electrical Security, No. 03-CV-5175, 2007 WL 2461823, at *3 (E.D.N.Y. Aug. 27, 2007) (explaining administrative scheme under NYLL § 220). There can be no judicial review until that determination. Id. Thus, to proceed on his claim for unpaid wages at the prevailing wage rate under Article 8 of the NYLL, Ethelberth must demonstrate that he has exhausted his administrative remedies.
Ethelberth asserts that he filed an administrative complaint for unpaid wages, but provides no further corroboration of this assertion. (See Dkt. 66 (Onyenaemeka Ethelberth Affidavit ("Ethelberth Second Aff.")), ¶ 5). Ethelberth provides no details regarding this supposed filing, such as the filing date, who may be adjudicating the complaint, or the status or outcome of that complaint. Furthermore, even if Ethelberth did file an administrative complaint, nowhere does he aver that he saw the administrative process to completion.
The record thus fails to establish that Ethelberth has exhausted his administrative remedies. See Winsch v. Esposito Building Security, 48 A.D.3d 558, 852 N.Y.S.2d 199, 200 (2008) (affirming summary judgment dismissal of NYLL § 220 claim given lack of proof that any administrative determination had been rendered). Nor will the Court permit Ethelberth to circumvent the statutory requirement to exhaust administrative remedies under NYLL § 220 by simply asserting, without providing proof that should be readily available to him, that he has met the exhaustion requirement. The Court, therefore, grants summary judgment to Defendants on Count Two of the Amended Complaint, and dismisses it from this action.
Ethelberth brings Count Three of the Amended Complaint pursuant to the New York Minimum Wage Act, NYLL § 650 et seq., and therefore is not required to exhaust administrative remedies before doing so. Accordingly, the Court turns to the issue of whether Ethelberth qualifies for overtime under the New York Minimum Wage Act.
"New York's Labor Law is the state analogue to the federal FLSA." Santillan v. Henao, 822 F.Supp.2d 284, 292 (E.D.N.Y.2011). "Although the Labor Law `does not require a plaintiff to show either a nexus with interstate commerce or that the employer has any minimum amount of sales,' it otherwise mirrors the FLSA in compensation provisions regarding minimum hourly wages and overtime[.]" Id. (citing Chun Jie Yin v. Kim,
To recover overtime wages under the New York Minimum Wage Act, Ethelberth must prove that he was an "employee" and that Defendants were "employer[s]" as defined by the statute and accompanying regulations. See NYLL § 650 et seq.; N.Y. Comp.Codes R. & Regs. tit. 12 § 142-2.2. An employee under the New York Minimum Wage Act is "any individual employed or permitted to work by an employer in any occupation...." NYLL § 651(5). Having already found that Ethelberth was an employee of Choice within the meaning of the FLSA, the Court finds that Ethelberth was also an employee under the NYLL.
The NYLL's definition of an employer is broader than that contained in the FLSA, reaching "any individual, partnership, association, corporation, limited liability company, business trust, legal representative, or any organized group of persons acting as employer." NYLL § 651(6). While a genuine issue of material fact regarding Choice's engagement in interstate commerce precluded a determination on Choice's coverage under the FLSA, interstate commerce is not relevant to an employer's liability under the NYLL provisions at issue here. See Santillan, 822 F.Supp.2d at 292. Because there is no dispute that Choice "act[ed] as an employer," NYLL § 651(6), the Court easily finds that Choice is an employer for purposes of the New York Minimum Wage Act.
The Court also finds that Omogun may be held individually liable for Ethelberth's claim for overtime under the NYLL. As the Second Circuit recognized in Irizarry, the New York Court of Appeals has not yet answered the question of whether the FLSA's test for "employer" is the same as for the NYLL. Irizarry, 722 F.3d at 117. Nevertheless, the Court notes that districts in this Circuit "have consistently interpreted the definition of `employer' under the New York Labor Law coextensively with the definition used by the FLSA." Yu Y. Ho v. Sim Enterprises, Inc., No. 11-CV-2855, 2014 WL 1998237, at *10 (S.D.N.Y. May 14, 2014) (citing Moon v. Kwon, 248 F.Supp.2d 201, 236 n. 17 (S.D.N.Y.2002)). The Court finds no reason to depart from this interpretation. Having found that Omogun was an employer under the FLSA, the Court finds that Omogun also qualifies as an employer under the New York Minimum Wage Act.
Having resolved the threshold questions of liability in Ethelberth's favor, the Court
Defendants seek dismissal of Ethelberth's common law claims for breach of contract (Count One) and unjust enrichment (Count Five), arguing that these claims are duplicative of Ethelberth's FLSA and NYLL claims. In Defendants' view, Ethelberth's state common law claims are duplicative because they "are premised squarely on violations of the FLSA and NYLL and not upon some other agreement between the parties." (Defs. MSJ Memo at ECF 8-11). Ethelberth opposes, arguing that he may maintain claims in the alternative and that such claims are based on Defendants' promise that he would be paid the "prevailing wage rate." (Pl. Opp. at ECF 25-26).
The Second Circuit has not squarely addressed whether common law claims for overtime are preempted by the FLSA. Kaur v. Royal Arcadia Palace, Inc., 643 F.Supp.2d 276, 297 (E.D.N.Y. 2007) (noting "law is unsettled as to whether the FLSA preempts state common law claims"). However, courts in the Second Circuit have allowed common law claims for straight time compensation to go forward so long as they are not premised on the same facts as the FLSA claim. See Acevedo v. WorkFit Med. LLC, No. 14-CV-06221, 2014 WL 4659366, at *14 (W.D.N.Y. Sept. 17, 2014) (finding state common law claims preempted with respect to overtime wages but allowing claims seeking unpaid straight time compensation to proceed); Kaur, 643 F.Supp.2d at 297 (dismissing portion of common law claim premised on facts underlying the FLSA claim); see also Wilk v. VIP Health Care Servs., Inc., No. 10 CIV. 5530, 2012 WL 560738, at *4 (E.D.N.Y. Feb. 21, 2012) (allowing breach of contract claim to go forward at motion to dismiss stage, given that complaint was not clear whether that claim sought both overtime and straight time). When considering whether the statutory claims and the common law claims are duplicative, the courts analyze "whether the FLSA and common law claims are grounded in the same facts." Chen v. Street Beat Sportswear, Inc., 364 F.Supp.2d 269, 292-293 (E.D.N.Y.2005).
Based on the Amended Complaint and Ethelberth's pleadings, it is possible to construe Ethelberth's common law claims as seeking wages for both overtime and straight time.
However, Ethelberth's common law claims seeking recovery of straight time compensation remain viable. Ethelberth argues that Defendants failed to pay him the prevailing minimum wage rate under NYLL § 220 at certain SCA project sites, and that this was done in breach of an agreement between the parties. (Pl. MSJ Memo at ECF 14-15).
Ethelberth, however, cannot maintain his breach of contract claim, even as limited to straight time compensation. Ethelberth claims that he had an oral agreement with Defendants to be paid the prevailing wage rate when he worked at schools (Ethelberth Aff., ¶ 4), and that Defendants' failure to pay him at such rates breached this agreement. In addition to denying that such an agreement existed (Defs. 56.1, ¶ 25), Defendants argue that Ethelberth cannot pursue a breach of contract claim that is premised
The Court examines whether the relevant NYLL provisions bar recovery pursuant to a breach of contract theory. By alleging an agreement for payment based on "prevailing wage rates," Ethelberth's breach of contract claim is clearly premised on a violation of the prevailing wage provisions set forth in NYLL § 220. While NYLL § 220 requires exhaustion of administrative remedies prior to pursuing a private right of action under the NYLL, it does not foreclose a plaintiff's ability to pursue a remedy via the common law. In New York, employees "are permitted to pursue their claims under the administrative procedures provided therein or as third-party beneficiaries to the state funded contracts." Eldred v. Comforce Corp., No. 08-CV-1171, 2010 WL 812698, at *7 (N.D.N.Y. Mar. 2, 2010) (citing cases) (emphasis added); see also Hapanowicz v. Alexandria Tile Co., No. 11-CV-127, 2014 WL 1311441, at *6 (E.D.N.Y. Mar. 31, 2014) (finding plaintiffs were not required to exhaust the NYLL § 220 administrative process because they could pursue "a common law breach of contract claim as the intended third-party beneficiary of a public works contract"); Sobczak v. AWL Indus., Inc., 540 F.Supp.2d 354, 361 (E.D.N.Y. 2007) ("New York law permits parallel remedies, allowing employees to pursue either administrative claims under, or sue as third-party beneficiaries of, state prevailing wage contracts.").
However, the cases make clear that the alternative common law remedy is as a third-party beneficiary to a public contract, not any agreement between the employee and the employer. See Hapanowicz, 2014 WL 1311441 at *6 (recognizing common law cause of action as third-party beneficiary); Sobczak, 540 F.Supp.2d at 361 (same).
Rather, Ethelberth asserts that Defendants "breached their contractual obligations to Plaintiff." (Am. Compl., ¶¶ 28-32). Accordingly, absent proof that he was a third-party beneficiary to Choice's SCA contracts with the City, Ethelberth cannot prevail on his breach of contract claim for unpaid wages.
Having limited Ethelberth's claim for unjust enrichment to his straight time compensation only, the Court examines whether any disputed issues of fact preclude judgment as to Defendants' liability for unjust enrichment with respect to this claim.
"To prevail on a claim of unjust enrichment, a plaintiff must establish that: (1) the defendant was enriched; (2) the enrichment was at plaintiff's expense; and (3) the circumstances are such that equity and good conscience require restitution." Bongat v. Fairview Nursing Care Ctr., Inc., 341 F.Supp.2d 181, 188 (E.D.N.Y.2004) (citing Golden Pac. Bancorp v. FDIC, 273 F.3d 509, 519 (2d Cir. 2001) (applying New York law)). Claims for unjust enrichment seeking monetary, as opposed to equitable, relief are governed by a three-year statute of limitations. See Matana v. Merkin, 957 F.Supp.2d 473, 494 (S.D.N.Y.2013) (citing Ingrami v. Rovner, 45 A.D.3d 806, 847 N.Y.S.2d 132 (2007)). "The applicable limitations period begins to runs `upon the occurrence of the wrongful act giving rise to a duty of restitution and not from the time the facts constituting the fraud are discovered.'" Matana, 957 F.Supp.2d at 494 (quoting Cohen v. S.A.C. Trading Corp., 711 F.3d 353, 364 (2d Cir.2013)).
Because Ethelberth seeks monetary relief through the recovery of wages, his claim for unjust enrichment is limited to September 28, 2009, three years from the date he filed this action. Ethelberth asserts that during this period, Defendants paid him "a wage rate for work at Schools of $12 to $15.61, while the prevailing wage rate for Plaintiff's experience level was $17.11." (Pl. 56.1, ¶ 53; Pl. Ex. 37). Defendants admit that they are required to pay the mandated minimum wage under the FLSA and the NYLL, but deny that they agreed to pay "any particular wage rate for any particular location." (Defs. 56.1 Opp., ¶ 53).
Given the dispute over the rate at which Ethelberth should have been paid during the relevant time period, the Court cannot definitively determine that Defendants were enriched at Ethelberth's expense. The Court therefore denies summary judgment to both parties on Ethelberth's claim for unjust enrichment.
The Court does not address Defendants' argument on diversity jurisdiction at this juncture. (Defs. MSJ Memo at ECF 23-24). Given the denial of summary judgment on Ethelberth's FLSA claim, this Court's exercise of federal question and supplemental jurisdiction over Ethelberth's claims remains proper.
Accordingly, it is hereby ORDERED Plaintiff's and Defendants' cross-motions for summary judgment are GRANTED IN
SO ORDERED.
What Ethelberth does assert, however, is that he is due straight time compensation pursuant to the prevailing wage, citing NYLL § 220. (Pl. 56.1 ¶ 32). That provision is contained in Article 8 of the NYLL, which is titled "Public Work." See NYLL § 220 et seq. NYLL § 220(2) sets forth that contracts with the state, public benefit corporation or municipal corporation (such as Choice's SCA contracts) "shall contain a stipulation that no laborer ... in the employ of the contractor, subcontractor or other person doing or contracting to do the ... work contemplated by the contract shall be permitted or required to work more than eight hours in any one calendar day or more than five days in any one week except in cases of extraordinary emergency...." NYLL § 220(2). NYLL § 220(3)(a) goes on to provide that the wages to be paid for such work "shall not be less than the prevailing rate of wages as hereinafter defined."
