The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
Kai Lock et al.,
Plaintiffs,
2:23-cv-07904
-v- (NJC) (ST)
Costco Wholesale Corporation,
Defendant.
MEMORANDUM AND ORDER
NUSRAT J. CHOUDHURY, District Judge:
Plaintiffs Kai Lock, Kyle Straker, and Michael Nickich (“Lock,” “Straker,” “Nickich,”
and collectively, “Plaintiffs”) have sued Defendant Costco Wholesale Corporation (“Costco”) to
recover unpaid overtimes wages and other damages for violations of the Fair Labor Standards
Act (“FLSA”), 29 U.S.C. § 201, et seq., and the New York Labor Law (“NYLL”), Articles 6 and
19. (Compl., ECF No. 1.) Before me is Costco’s partial motion to dismiss under Rule 12(b)(1) of
the Federal Rules of Civil Procedure (“Fed. R. Civ. P.”), which seeks dismissal of Plaintiffs’
wage statement claim under NYLL § 195(3) (“Section 195(3)”) for lack of standing (the
“Motion”). (ECF Nos. 18–20.) For the reasons set forth below, Costco’s Motion is granted, and
Plaintiffs’ Section 195(3) wage statement claim is dismissed.
BACKGROUND
The Complaint alleges that the Plaintiffs worked as Junior Managers at Costco between
2020 and 2022. (Compl. ¶¶ 13, 31, 47.) The Complaint alleges that as Junior Managers, Plaintiffs
regularly worked more than forty hours a week and identifies several specific work weeks in
which Plaintiffs worked more than forty hours per week. (Id. ¶¶ 14–19, 32–36, 48–53.)
According to the Complaint, however, Costco paid Plaintiffs a fixed salary for forty hours of
work each week (id. ¶¶ 13, 20, 31, 37, 47, 54, 95–96) and failed to pay Plaintiffs overtime pay
during those weeks where Plaintiffs worked in excess of 40 hours (id. ¶¶ 19–21, 36–38, 52–55).
The Complaint also alleges that Costco failed to record the number of hours that
Plaintiffs worked and provided Plaintiffs with wage statements that listed an inaccurate number
of hours worked. (Id. ¶¶ 22–24, 38–40, 56–58, 104–04.) Lock worked more than forty hours
during the weeks of December 6, 2021 and December 19, 2021, but was not paid for overtime
hours worked during those two weeks, and his wage statement incorrectly stated that he had only
worked eighty hours during that two-week period. (Id. ¶¶ 19, 21–22, 24.) Similarly, Nickich
worked more than forty hours a week during the weeks of May 24, 2021 and June 6, 2021. (Id.
¶ 53.) Nickich was not paid any for any overtime hours worked during those two weeks, and his
wage statement incorrectly reported that he had only worked eighty hours during that two-week
period. (Id. ¶¶ 55–58.)
The Complaint alleges that these inaccurate wage statements failed to provide Plaintiffs
“with the information necessary to determine whether their weekly hours ever exceeded 40 in a
single workweek, entitling them to overtime” and that “[t]his hindered Plaintiffs . . . ability to
challenge the unlawful wage payment at the time of the payment.” (Id. ¶¶ 109–10.)
On October 23, 2023, Plaintiffs filed the Complaint, bringing three claims on behalf of
themselves and a class of similarly situated persons: (1) failure to pay overtime wages under
Section 207(a)(1) of the Fair Labor Standards Act (the “FLSA”); (2) failure to pay overtime
wages under NYLL Section 650; and (3) failure to supply an accurate statement of wages as
required by NYLL Section 195(3). (Id. at 15–17.)
On February 1, 2024, Costco served Plaintiffs with its partial Motion to Dismiss and
supporting memorandum (Mot., ECF No. 18; Def.’s Br., ECF No. 18-1.) Plaintiffs opposed on
February 16, 2024. (Pls.’ Br., ECF No. 19). On March 7, 2024, Defendant served its reply
(Def.s’ Reply, ECF No. 20) and filed the fully-briefed Motion. (ECF Nos. 19–20.)
On April 5, 2024, Plaintiffs filed a motion to conditionally certify Plaintiffs’ proposed
collective under the FLSA. (FLSA Collective Cert. Mot., ECF No. 24.) Each of the Plaintiffs
submitted a declaration in support of this motion (collectively, “Plaintiffs’ declarations”). (Lock
Decl., ECF No. 24-2; Straker Decl., ECF No. 24-3; Nickich Decl., ECF No. 24-4.)
In Lock’s declaration, he attests that, as a Junior Manager at Costco from June 2021 to
about January 2022, he “regularly worked over 40 hours a week” and that he “generally worked
65 hours each week” (Lock Decl. ¶¶ 5, 7, 26, 33.) According to Lock, he was scheduled to work
“five nine-hour shifts per week,” and during busy times, he was scheduled “to work a sixth nine-
hour shift.” (Id. ¶¶ 27–28.) Lock additionally affirms that he “had to work before and after [his]
scheduled shift” because while he was “scheduled to begin working at 3:00 am, . . . for
approximately half of [his] shifts,” he “was called to come in at 1:00 am or 2:00 am,” and while
his “typical shift was schedule to end at noon,” he was “always required . . . to stay late, not
leaving until between 2:00 pm and 5:00 pm.” (Id. ¶¶ 31–32.) During these shifts, Lock attests
that he “always had to take a shortened meal break” and “was not able to take [an] uninterrupted
meal break exceeding 10 minutes.” (Id. ¶ 29.) Lock additionally attests that he “know[s] that
Junior Managers were paid a salary without overtime pay” because he “worked over 40 hours
every week and was never paid overtime” and because he has “spoken to other Junior Managers
about not getting overtime pay despite the fact that we work over 45 hours per week.” (Id. ¶ 41.)
In Straker’s declaration, Straker attests that, as a Junior Manager at Costco from July
2020 to 2022, he “regularly worked over 40 hours a week,” that he “generally worked 50 hours
each week,” and that he “worked about 60 to 70 hours per week” during busy seasons. (Straker
Decl. ¶¶ 2, 9–10, 27, 31). Straker affirms that he was scheduled to work “five nine-hour shifts
per week” and “at times,” during busy periods, he had to work a sixth shift. (Id. ¶¶ 28–29.) He
attests that during his shifts, he “regularly worked about 10 to 12 hours per day” and, during the
busy periods, he “regularly worked 12 or more hours per day.” (Id. ¶¶ 28–29.) He also states that
he “regularly” could only take a meal break for fifteen minutes or less. (Id. ¶ 30.) Straker affirms
that he knew “that Junior Managers were paid a salary without overtime pay” because that
information “was stated on the job postings for these positions,” which were “either placed on
the bulletin board by the breakroom or were available through the company portal.” (Straker
Decl. ¶ 39.)
Like Straker, Nickich attests in his declaration that, as a Junior Manager for Costco from
December 2020 to June 2022, he “regularly worked over 40 hours a week,” “generally worked
50 hours each week,” and that during busy periods, “worked about 60 to 70 hours per week.”
(Nickich Decl. ¶¶ 29, 34.) Nickich states that he was scheduled to work “five nine-hour shifts per
week,” but that he was required to work “six or even seven shifts per week” during busy periods.
(Id. ¶¶ 30–31.) Like Straker and Lock, Nickich affirms that he worked longer shifts than he was
scheduled to work; he affirms that he “generally worked about 10 hours per day,” that he
“regularly worked 10 to 12 hours per day,” and that he worked even more during busy periods.
(Id. ¶¶ 31, 33.) He also attests that he “was not able” to take an “uninterrupted meal break
exceeding 15 minutes.” (Id. ¶ 32.) Nickich declares that he knows “that Junior Managers were
paid salary without overtime pay” because “the General Manager and the Payroll HR Supervisor
told [him] that Junior Managers are all paid the same way . . . when they offered [him] the
promotion in about December 2020.” (Id. ¶ 42.)
On April 16, 2024, Defendant filed a sur-reply in further support of its Motion, asserting
that statements in Plaintiffs’ declarations contradicted the Complaint’s allegations regarding
whether Plaintiffs were harmed by Costco’s provision of allegedly inaccurate wage statements.
(Def.’s Sur-reply, ECF No. 27.) Plaintiffs filed a sur-reply on April 18, 2024 (Pls.’ Sur-reply,
ECF No. 28).
After the parties filed their briefing, the Second Circuit decided Guthrie v. Rainbow
Fencing, Inc., 113 F.4th 300 (2d Cir. 2024), which clarified the showing a plaintiff must make to
establish standing to bring a wage notice or wage statement claim under Section 195 of the
NYLL. On September 6, 2024, the parties filed a joint notice of supplemental authority
addressing Guthrie and their respective positions on whether Plaintiffs meet the standard for
demonstrating standing to assert a Section 195(3) claim to challenge allegedly inaccurate wage
statements. (Joint Not. of Supp. Auth., ECF No. 30.)
LEGAL STANDARDS
I. Rule 12(b)(1) Motion to Dismiss
A district court properly dismisses a claim under Rule 12(b)(1) when the court “lacks the
statutory or constitutional power to adjudicate it, such as when . . . the plaintiff lacks
constitutional standing to bring the action.” Cortlandt St. Recovery Corp. v. Hellas Telecomms.,
S.a.r.l, 790 F.3d 411, 416–17 (2d Cir. 2015).1 At the pleading stage, the Second Circuit has
“recognized that a Rule 12(b)(1) motion challenging subject matter jurisdiction may be either
1 Unless otherwise indicated, case quotations omit all internal quotation marks, alterations, and
citations.
facial, i.e., based solely on the allegations of the complaint and exhibits attached to it, or fact-
based, i.e., based on evidence beyond the pleadings.” Harty v. W. Point Realty, Inc., 28 F.4th
435, 441 (2d Cir. 2022). Where a party raises a facial challenge to the court’s subject matter
jurisdiction, “the plaintiff has no evidentiary burden”; the district court need only “determine
whether the [p]leading alleges facts that affirmatively and plausibly suggest that the plaintiff has
standing to sue.” Carter v. HealthPort Techs., LLC, 822 F.3d 47, 56 (2d Cir. 2016); see also
Lugo v. City of Troy, 114 F.4th 80, 87 (2d Cir. 2024). In assessing whether a claim should be
dismissed for lack of subject matter jurisdiction pursuant to Rule 12(b)(1), a court “must take all
uncontroverted facts in the complaint (or petition) as true, and draw all reasonable inferences in
favor of the party asserting jurisdiction.” Tandon v. Captain’s Cove Marina of Bridgeport, Inc.,
752 F.3d 239, 243 (2d Cir. 2014).
Where a party has placed jurisdictional facts into dispute by “offer[ing] extrinsic
evidence that contradicts the material allegations of the complaint,” however, “the court has the
obligation to decide issues of fact by reference to evidence outside the pleadings, such as
affidavits.” Harty, 28 F.4th at 442. Where the defendant raises a fact-based challenge and the
extrinsic evidence “reveals the existence of factual problems,” the plaintiff “will need to come
forward with evidence controverting that presented by the defendant regarding standing.” Lugo,
114 F.4th at 87. “In that case, the party asserting subject matter jurisdiction has the burden of
proving by a preponderance of the evidence that it exists.” Tandon, 752 F.3d at 243; Katz v.
Donna Karan Co., L.L.C., 872 F.3d 114, 120 (2d Cir. 2017) (same). “[I]f the evidence proffered
by the defendant is immaterial because it does not contradict plausible allegations that are
themselves sufficient to show standing,” the plaintiffs “are entitled to rely” on the complaint’s
allegations. Carter, 822 F.3d at 57.
II. Standing
Article III of the Constitution “limits the federal judicial power to deciding ‘Cases’ and
‘Controversies.’” Soule v. Conn. Ass’n of Sch., 90 F.4th 34, 45 (2d Cir. 2023) (citing U.S. Const.
art. III § 2). A case or controversy only exists when the plaintiff has “standing” to sue because
they have “a personal stake in the outcome of the litigation.” Id. (citing United States v. Texas,
599 U.S. 670 (2023)). In order to establish Article III standing, a plaintiff must show: “(1) that
they suffered an injury in fact, (2) that the injury is fairly traceable to Defendants’ challenged
conduct, and (3) that the injury is likely to be redressed by a favorable judicial decision.” Id.
(citing Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016)). The Supreme Court has clarified that
where “a statute grants a person a statutory right and purports to authorize that person to sue to
vindicate that right,” a defendant’s violation of that statute does not “automatically satisf[y] the
injury-in-fact requirement”; a plaintiff must still demonstrate a concrete injury caused by that
statutory violation. TransUnion LLC v. Ramirez, 594 U.S. 413, 426 (2021). A concrete injury is
one that “has a close relationship to a harm traditionally recognized as providing a basis for a
lawsuit in American courts—such as physical harm, monetary harm, or various intangible harms.
. . .” Id. at 417 (quoting Spokeo, 578 U.S. at 340–41).
In the context of a wage statement claim under Section 195(3) of the NYLL, “a plaintiff
cannot rely on technical violations of the [NYLL]” to establish an injury-in-fact “but must allege
actual injuries suffered as a result of the alleged . . . wage statement violations.” Guthrie, 113
F.4th at 305 (quotation marks omitted). In order to establish such an actual injury, a plaintiff
must demonstrate “some causal connection between the lack of accurate notices and [the alleged]
downstream harm.” Id. at 308. A plaintiff need not, however, establish an injury that is greater
than or different from the loss of wages or overtime pay alleged in their lawsuit. Id. at 309. A
plaintiff can establish an injury-in-fact by “show[ing] that he or she would have undertaken . . .
advocacy and plausibly would have avoided some actual harm or obtained some actual benefit if
accurate notices had been provided.” Id. at 308. A plaintiff may be able to establish a concrete
injury in the form of a financial harm, for example, by showing that “inaccurate or noncompliant
notices prevented the employee from obtaining full payment of wages in a timely fashion.” Id. at
309.
DISCUSSION
The Complaint alleges that Plaintiffs were misclassified as overtime-exempt employees
and that their wage statements failed to provide an accurate number of hours that Plaintiffs
worked in violation of Section 195(3). See NYLL § 195(3) (requiring that “[f]or all employees
who are not exempt from overtime compensation . . . the statement shall include,” inter alia, “the
number of regular hours worked” and “the number of overtime hours worked”); see also Compl.
¶¶ 23–24, 39–40, 57–58, 104–06. The Complaint alleges that Plaintiffs suffered one injury from
Costco’s violation of Section 195: that the inaccurate wage statements failed to provide Plaintiffs
“with the information necessary to determine whether their weekly hours ever exceeded 40 in a
single workweek, entitling them to overtime.” (Compl. ¶ 109.) The Complaint alleges that this
lack of information “hindered” Plaintiffs’ “ability to challenge the unlawful wage payment at the
time of the payment.” (Id. ¶ 110.)
Costco argues that the allegation that Plaintiffs did not have “information necessary to
determine whether their weekly hours ever exceeded 40 in a single workweek” (id. ¶ 109) is not
true. (Def.’s Sur-reply at 1–2.)2 Specifically, Costco asserts that Plaintiffs’ declarations show that
Plaintiffs knew they were working more than forty hours a week at the time that Plaintiffs
received their wage statements. (Id.)
In their declarations, each of the Plaintiffs attests that he worked more than forty hours a
week while employed as Junior Managers at Costco and identifies the number of hours per week
that he generally worked. (See Lock Decl. ¶¶ 26, 33 (“65 hours each week”); Straker Decl. ¶¶ 27,
31 (“50 hours each week,” but “about 60 to 70 hours per week” during busy seasons); Nickich
Decl. ¶¶ 29, 34 (“50 hours each week,” but “about 60 to 70 hours per week” during busy
seasons).) None of the Plaintiffs explicitly state when they learned that they were generally
working these numbers of hours per week. Each of the Plaintiffs, however, describes their typical
schedules and work hours in detail, and the typical weekly shifts and hours they describe exceed
forty hours in any given week. (See Lock Decl. ¶¶ 27–32; Straker Decl. ¶¶ 28–30; Nickich Decl.
¶¶ 30–33; see also supra Background Section.)
For example, Lock attests that he “regularly worked over 40 hours a week,” that he
“generally worked 65 hours each week,” that he was scheduled to work “five nine-hour shifts per
week,” that he was scheduled “to work a sixth nine-hour shift” during busy periods, and that he
“had to work before and after [his] scheduled shift.” (Lock Decl. ¶¶ 26–28, 30, 33 (emphasis
supplied).) Thus, according to Lock, he worked 45 to 65 hours per week when employed by
Costco as a Junior Manager. Straker attests that he “regularly worked over 40 hours a week,” that
he “generally worked 50 hours each week,” that he “worked about 60 to 70 hours per week”
2 Costco raises several other arguments in support of its Motion. (See Def.’s Br. at 3–8.) Because
I find that Plaintiffs have failed to establish standing to bring their claim under Section 195 of the
NYLL, I do not reach Costco’s other arguments.
during busy seasons, that he was scheduled to work “five nine-hour shifts per week,” that at
times he worked a sixth shift during busy periods, that he “regularly worked about 10 to 12 hours
per day,” and that he “regularly worked 12 or more hours per day” during busy periods. (Straker
Decl. ¶¶ 27–29, 31.) Thus, according to Straker, he worked 50 to 72 hours per week when
employed by Costco as a Junior Manager. Finally, Nickich attests that he “generally worked 50
hours each week,” that he “worked about 60 to 70 hours per week” during busy periods, that he
was scheduled to work “five nine-hour shifts per week,” that he was required to work “six or
even seven shifts per week” during busy periods, that he “generally worked about 10 hours per
day,” and that he “regularly worked 10 to 12 hours per day” or more during busy periods.
(Nickich Decl. ¶¶ 29–31, 33–34.) Thus, according to Nickich, he worked 50 to 84 hours per
week.
Facts set forth in Plaintiffs’ declarations thus demonstrate that each Plaintiff knew their
weekly work schedules at the time that they were working those shifts and that they therefore
knew their weekly hours exceeded forty hours per week. These facts directly contradict the
Complaint’s allegation that Costco’s provision of inaccurate wage statements to Plaintiffs failed
to provide them “with the information necessary to determine whether their weekly hours ever
exceeded 40 in a single workweek, entitling them to overtime” and that “[t]his hindered
Plaintiffs . . . ability to challenge the unlawful wage payment at the time of the payment.”
(Compl. ¶¶ 109–10.) Because these declarations “contradict[] the material allegations of the
complaint,” I am obligated to consider the declarations in resolving Costco’s Motion. Harty, 28
F.4th at 442.
Plaintiffs did not submit any additional evidence or request leave to submit any evidence
in light of Costco’s factual challenge to their standing to bring a Section 195(3) claim. (See Pl.’s
Sur-reply.) Plaintiffs’ declarations demonstrate that Plaintiffs knew they were working more than
forty hours a week at the time they worked those hours, and Plaintiffs have not identified any
evidence indicating otherwise. Plaintiffs have therefore failed to demonstrate that Costco’s
allegedly inaccurate wage statements caused them injury by failing to notify them that they
worked over forty hours a week, as alleged in the Complaint. (See Compl. ¶¶ 109–10.) The
Complaint does not allege any other reason that the inaccurate wage statements prevented the
Plaintiffs from obtaining full payment of their wages in a timely fashion.
For all of these reasons, Plaintiffs have failed to demonstrate that they suffered an actual
injury resulting from Costco’s provision of allegedly inaccurate wage statements, such as the
inability to timely advocate for unpaid wages or timely challenge their misclassification as
exempt employees, or that there is “some causal connection between the lack of accurate” wage
statements and such “downstream harm[s]” as required by Guthrie, 113 F.4th at 305, 308.
Because Plaintiffs lack standing to bring the wage statement claim under NYLL Section 195(3)
claim, this claim is dismissed.
CONCLUSION
For the reasons set forth above, Defendant’s Partial Motion to Dismiss (ECF No. 18) is
granted and the Complaint’s third cause of action alleging a violation of NYLL Section 195(3) is
dismissed.
Dated: Central Islip, New York
November 8, 2024
November 8, 2024
________/s/ Nusrat J. Choudhury_______
NUSRAT J. CHOUDHURY
United States District Judge