OPINION AND ORDER
SARAH NETBURN, Magistrate Judge.
On October 14, 2016, the Court entered a default for plaintiff Washington Eduardo Polit ("Polit") against defendant Global Foods International Corporation ("Global Foods"). On November 11, 2016, Polit submitted Proposed Findings of Fact and Conclusions of Law in support of damages, seeking a total of $59,561.82 in damages (as well as $19,003 in attorney's fees and filing costs), to which Global Foods failed to respond. The Court held an evidentiary hearing regarding Polit's damages on April 3, 2017. Because Polit has provided a sufficient basis on which to award damages and attorney's fees—albeit with reductions to each—the Court grants a total award in the amount of $30,603, in addition to pre-judgment interest.
Polit brought this action on September 11, 2014, alleging unpaid minimum wages and unlawful deductions from his salary in violation of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"), and the New York Labor Law, N.Y. Lab. Law § 650 et seq. ("NYLL"). On October 7, 2014, Global Foods answered the complaint and raised counterclaims against Polit, namely, that he breached his employment agreement and duty of loyalty by disclosing confidential business information and trade secrets to third parties. Polit filed an amended complaint on November 25, 2014, claiming that defendant unlawfully retaliated against him by asserting the counterclaims.
The parties litigated the matter to trial, which was scheduled to begin on October 26, 2016. On September 23, 2016, defense counsel submitted an affidavit stating that Global Foods no longer wished to defend this case and would consent to an entry of default, with the understanding that a judgment would be entered against it following an inquest on damages. This Court entered default against Global Foods as to liability on each of Polit's claims on October 14, 2016. Polit submitted Proposed Findings of Fact and Conclusions of Law in support of damages, as well as various exhibits, on November 11, 2016. In addition to unpaid wages, Polit seeks damages for wage and hour notice violations, liquidated damages under the FLSA and NYLL, pre-judgment interest, and attorney's fees and costs. Global Foods did not submit a response. The Court held an evidentiary hearing on April 3, 2017, at which Polit testified.
I. Applicable Law
Although "a default judgment entered on well-pleaded allegations in a complaint establishes a defendant's liability," it does not reach the issue of damages.
Where the defaulting defendant does not make any submission on a damages inquest, a court must assess whether the plaintiff has provided a sufficient basis for the court to determine damages.
To assess whether plaintiff has articulated a sufficient basis for damages, a court has the discretion (but is not required) to hold a hearing to determine the amount of damages that should be awarded on a default.
B. Federal and State Wage Law
An employee who brings an action under the FLSA for unpaid wages must prove that he performed the work and was not compensated properly for his time.
A. Facts Related to Liability
In light of Global Foods' default, the Court is required to accept all of Polit's allegations as true, except for those pertaining to damages.
Polit was an executive chef at Global Food's restaurant in Times Square in Manhattan. His general responsibilities included "menu creation, work the concept, hiring and training all the staff, and any other duties involved in the executive chef position." Polit Dep. Tr. at 15:20-23, attached as Ex. B to the Clark Declaration
Polit started working on January 16, 2013, as part of a team tasked with catering dinner events for investors and brainstorming the company's brand.
Polit testified that he and Global Foods agreed, in a December 2012 email exchange, to a start date of January 16, 2013, and an annual salary of $80,000.
An official offer letter, dated February 1, 2013, stated, "Your first day of employment will be no later than Monday, February 4, 2013, and you will be compensated at a rate of $80,000 per annum, payable on a bi-weekly basis, except that, for the first 2 bi-weekly pay-periods, your salary will be at half that rate." Feb. 1, 2013 Offer Letter, Ex. G (emphasis added) (ECF No. 56-7). On February 4, 2013, Polit signed a wage notice form, which showed Global Foods' name and address but did not provide the rate of pay or the company's phone number.
Polit did not receive any wage statements until May 3, 2013 (for the pay period ending on April 28, 2013).
On July 17, 2014, Global Foods terminated Polit's employment. Polit now seeks both unpaid minimum wage and unpaid wages (based on an $80,000 yearly salary) for the period from January 16, 2013 to February 1, 2013. He also claims that half of his salary was unlawfully withheld for the period from February 4, 2013 to February 28, 2013. He does not assert any unpaid wages with respect to the rest of his employment.
B. Statutes of Limitation
Polit brings his claim pursuant to the FLSA and the NYLL on September 10, 2014. The statute of limitations is six years under the NYLL and two years under the FLSA.
Polit He alleges that Global Foods' violations were willful, a fact the Court accepts as true given its default.
A. Unpaid Wages
1. January 16-February 1, 2013
Polit alleges he was not paid at all for work performed during this period. He seeks minimum wage in the amount of $754 and unpaid wages in the amount of $4,000 (based on a yearly salary of $80,000). Polit, however, is not entitled to a double recovery of wages (i.e., both minimum wage and unpaid wages). Because the parties did not reach a negotiated salary with regards to the work Polit performed for the last two weeks of January 2013, the question before the Court is whether to apply the minimum wage, the negotiated half-pay rate agreed to for February 2013, or the negotiated annual salary of $80,000 that was paid starting March 4, 2013.
Because Global Foods failed to provide or maintain a complete set of pay records, the Court first reviews the record to confirm that Polit actually worked during the first two and half weeks of employment in January 2013. The evidence before the Court establishes that Polit worked from January 16 to February 1, 2013.
Polit's start date of January 16, 2013, is well-supported by both testimony and documentary evidence.
Second, the Court reviews the record to assess whether the parties agreed to a rate of pay for the January term. Polit testified that, in December 2012, he and Global Foods had agreed on an $80,000 salary for work beginning on January 16, 2013. Polit Dep. Tr. at 5:2-6, Ex. B (ECF No. 56-2) (Mr. Polit: "I didn't have any offer letter at that time yet, but we agreed on a salary of $80,000, yes." The Court: "Okay. And did they say they would start paying you that salary starting January 16th?" Mr. Polit: "Yes. I mean, that was the salary that they agreed as it would be on, yes."). But the evidence submitted to the Court shows that, in the December 2012 email exchange between Polit and Roberts, the parties addressed only his salary for the "first month" (i.e., February 2013), which would be pegged at a $40,000 yearly salary. Email Between Clark and Roberts at 2, Ex. C (ECF No. 61-3). Aside from the carve-out for February, his "regular $6,667 monthly rate" would apply.
Finally, the Court performed its own review of the earning statements submitted as part of Polit's damages application in order to confirm that Polit was not paid anything for the period from January 16 to February 1, 2013. Determining whether Polit was paid was especially difficult in light of the fact that: (1) Polit did not receive any earning statements from before May 3, 2013, and (2) the earning statements for the first two pay periods in which he started receiving statements (specifically, the pay periods ending on April 28 and May 5, 2013) reflected multiple, different payments for the same pay period. Neither Polit's counsel nor the current CEO of Global Foods knew why Polit received multiple payments or which specific pay periods the extra payments corresponded to.
The following facts guided the Court's analysis of Polit's earning statements. First, the document Bates-stamped "GFIC-4" in Exhibit I (ECF No. 56-9) is the first earning statement he received. This finding is supported by Polit's testimony that he did not start receiving statements until May 3, 2013. Second, Polit's weekly salary for the month of February 2013 was $769.23 (based on a rate of half the annual salary of $80,000, pursuant to the terms of his offer letter). His weekly salary for the month of March 2013 was $1,538.46 (based on his normal salary of $80,000). Third, Polit was given a raise in his yearly salary to $100,000 that took effect on the pay period beginning on April 1, 2017.
The evidence establishes that Polit was paid a total of $18,846.51 for the pay periods ending on April 28, 2013, and May 5, 2013.
Polit's earnings for February and March 2013 total $9,230.76. Deducting this amount from $14,999 leaves $5,769.23. Because his yearly raise of $100,000 took effect on April 1, Polit earned $5,769.23 for the first three weeks of April 2013, which corresponds precisely to the amount left over from February 2013, March 2013, and the two weeks of April 22 (ending on April 28) and April 29, 2013 (ending on May 5).
Polit seeks a total of $4,000 for this period (2.6 weeks at an $80,000 yearly salary). Because the parties failed to negotiate and agree upon a rate of pay for work performed in January, but did negotiate and agree that (1) generally his annual salary would be $80,000, (2) except in February it would be half that rate, it would be unfair to rewrite his contract to extend the period during which Polit agreed to half his salary. Global Foods could have amended Polit's subsequent offer letter to reflect a start date of January 16, 2013, and a halved rate for this time. But it did not. Thus, the Court is left with applying the minimum wage during this period or the negotiated and agreed-upon salary of $80,000 rate. Applying the minimum wage seems inappropriate given Polit's status and responsibilities as an executive chef and it would be an unfair windfall to Global Foods, who essentially forced its executive chef to work without pay. Accordingly, the Court adheres to the contractually negotiated salary of $80,000. Polit is entitled to an award of $4,000 for the work he performed from January 16 to February 1, 2013.
2. February 4-February 28, 2013
Polit asserts that Global Food withheld half of his salary for the work he performed between February 4 and March 1, 2013. Polit's salary at this time was $80,000 per year or approximately $1,538.46 per week. He seeks $3,076.92 in unlawfully withheld wages for the month of February 2013.
But based on the evidence submitted, the Court sees no basis for awarding Polit additional compensation when Global Foods disclosed upfront that his salary for the first two biweekly pay-periods would be half of the $80,000 annual salary and Polit accepted this rate by accepting the position.
B. Liquidated Damages
Pursuant to the NYLL, a prevailing employee is entitled to liquidated damages in the amount of 100% of unpaid wages accrued unless the employer proves a good faith basis to believe that its underpayment of wages was in compliance with the law. N.Y. Lab. Law §§ 198(1-a), 663(1). Global Foods has not established that it had a good faith basis for believing that not paying its employee any money for work performed was in good faith compliance. Accordingly, for the period from January 16, 2013 to February 1, 2013, Polit is entitled to $4,000 in unpaid wages under the NYLL. Therefore, the Court orders a liquidated damages award of $4,000.
C. Pre-Judgment Interest
Polit is entitled under the NYLL to pre-judgment interest at the statutory rate of nine percent per year. N.Y. CPLR §§ 5001, 5004. Pre-judgment interest applies to only the amount of actual damages awarded under the NYLL and excludes the amount of liquidated damages.
October 16, 2013, is the midpoint between Polit's start date of January 16, 2013, and his end date of July 17, 2013. As noted above, the principal amount he is owed in unpaid wages is $4,000. Therefore, a nine percent annual interest rate on $4,000 should be applied from October 16, 2013, through the date judgment is entered.
D. Statutory Damages for the Wage Statement Violations
Section 195(1)(a) of the NYLL, effective from April 9, 2011, to December 28, 2013, requires employers to provide all employees with a written notice "at the time of hiring" and "on or before February first of each subsequent year of the employee's employment," containing, inter alia, information about the employee's rate of pay, hours of employment, and contact information for the employer. N.Y. Lab. Law § 195(1)(a) (McKinney 2011). Section 195 applies to all private sector employees, including bona fide executive employees normally exempt from overtime requirements. Wage Theft Prevention Act FAQ, N.Y. State Dep't of Labor, at 5 ("Since Section 195 does not contain any exclusions or exemptions from the notice requirements, the notice requirements in Section 195 apply to all employees regardless of their exempt status.").
An employee may recover "damages of fifty dollars for each work week that the violations [of § 195(1)(a)] occurred or continue to occur," up to a maximum of $2,500, as well as costs and reasonable attorney's fees. N.Y. Lab. Law § 198(1-b) (McKinney 2011).
In addition, § 195(3) of the NYLL requires employers to provide "a statement with every payment of wages, listing the following: the dates of work covered by that payment of wages; name of employee; name of employer; address and phone number of employer; rate or rates of pay and basis thereof" to each employee. N.Y. Lab. Law § 195(3) (McKinney 2011). If an employer fails to provide a compliant wage statement, the employee may recover "one hundred dollars for each work week that the violations occurred or continue to occur," up to a maximum of $2,500, as well as costs and reasonable attorney's fees. N.Y. Lab. Law § 198(1-d) (McKinney 2011).
Taking January 16, 2013, as his starting date, Polit is entitled to recover statutory damages of $1,460 (14.6 work weeks). Therefore, he is awarded $3,960 in total for wage and hour notice violations.
E. NYLL Unlawful Retaliation Claims
Polit seeks damages for retaliation claims under Section 215 of the NYLL, claiming that Global Foods brought its counterclaims solely to retaliate against him for commencing his civil action. Specifically, he seeks compensatory, punitive, and liquidated damages for retaliation in violation of Section 215, totaling $40,000.
But Section 215 requires that plaintiffs bringing any lawsuit under the anti-retaliation provision first serve notice of the suit upon the State Attorney General.
IV. Attorney's Fees and Costs
Polit seeks $19,003 in attorney's fees—$17,220 billed by his attorney, Justin S. Clark of Levine & Blit, for his work on this matter, as well as $1,783 in fees and filing costs. Mr. Clark has submitted contemporaneous time records showing that he performed 57.4 hours of services in this matter at a rate of $300 per hour.
Both the FLSA and the NYLL are fee-shifting statutes, permitting a prevailing employee to recover reasonable attorney's fees from the employer.
A. Reasonable Hourly Rate
Polit has requested an hourly rate of $300 for his attorney Justin S. Clark, who was admitted to practice in New York in 2013 and is currently a fourth year associate at Levine & Blit. Mr. Clark first began billing time for this matter in September 2014 as a first-year associate. Mr. Clark drafted the complaint and document requests, took depositions, and appeared before the Court.
The Court finds that $300 is a reasonable rate for an associate with four years of legal experience at an employment law firm who has assumed much, if not all, of the substantive responsibilities of this case.
B. Reasonable Hours
In determining how much attorney time should be compensated, the Court first looks to the amount of time spent on each category of tasks, as reflected in the contemporaneous time records, and then determines how much of that time was "reasonably expended."
As reflected in his billing entries, the tasks completed by Mr. Clark were necessary to prosecute this action, performed within a reasonable amount of time, and were the type of work in which a reasonable attorney would engage. With regards to travel, however, Mr. Clark spent a total of 2.4 hours traveling from his office in midtown Manhattan to the Court in lower Manhattan. See Clark Time Records at 1-2, Ex. L (ECF No. 56-12). "In recognition of the fact that travel time may be beneficial, but probably is not as productive as time at the office or in court, courts in the Second Circuit regularly reduce attorneys' fees by 50 percent for travel time."
In addition to attorney's fees, Polit is entitled to "those reasonable out-of-pocket expenses incurred by attorneys and ordinarily charged to their clients."
For the foregoing reasons, Polit is awarded (1) $4,000 in unpaid wages for the period between January 16, 2013, to February 1, 2013, plus pre-judgment simple interest at a rate of 9% per year starting on October 16, 2013; (3) $4,000 in liquidated damages under the NYLL; (4) $3,960 for statutory wage and hour notice violations; (5) $16,860 in attorney's fees; and (6) $1,783 in costs, for a total award of $30,603 (exclusive of interest). Polit is directed to serve this Opinion & Order upon Global Foods.
The Clerk of Court is respectfully directed to enter judgment and close the case.