The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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ANGEL MOGOLLAN,1
Plaintiff, REPORT AND
RECOMMENDATION
-against-
No. 25-CV-2710-NRM-JRC
GOURMET DELI GRILL CORP. f/d/b/a AVENUE
DELI, DELI & GROCERY FOOD INC. c/d/b/a FRESH
FOOD DELI & GRILL, and JOHN DOES 1-5,
Defendants.
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JAMES R. CHO, United States Magistrate Judge:
Plaintiff Angel Mogollan (“Mogollan” or “plaintiff”) brings this wage-and-hour action
against defendants Gourmet Deli Grill Corp. (“Gourmet Deli”) and Deli & Grocery Food Inc.
(“Deli & Grocery,” and collectively, “defendants”), pursuant to the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. §§ 201 et seq., and the New York Labor Law (“NYLL”) § 650 et seq. See
generally Compl., Dkt. 1. Upon plaintiff’s application and in light of defendants’ failure to
appear in or otherwise defend this action, the Clerk of the Court entered defendants’ default on
July 1, 2025. See Clerk’s Entry of Default, Dkt. 15. Currently pending before this Court, on a
referral from the Honorable Nina R. Morrison, is plaintiff’s motion for default judgment, seeking
unpaid minimum and overtime wages, spread of hours premiums, statutory penalties and
liquidated damages. See Order Referring Mot. dated August 4, 2025; Mot. for Default J., Dkt.
17; Proposed J., Dkt. 29-4; Pl.’s Damages Calculations (“Damages Calc.”), Dkt. 29-3.
For the reasons described below, this Court respectfully recommends granting, in part,
plaintiff’s motion for default judgment.
1 The Complaint is deemed amended to reflect the correct spelling of plaintiff’s name – “Mogollan.” See
Aff. of Angel Mogollan (“Mogollan Aff.”) ¶ 13, Dkt. 24.
Factual Background
The following facts are taken from the Complaint (Dkt. 1) and plaintiff’s affidavit (Dkt.
24) and are accepted as true for purposes of the instant motion. See Bricklayers & Allied
Craftworkers Loc. 2 v. Moulton Masonry & Constr., LLC, 779 F.3d 182, 187-89 (2d Cir. 2015).
Each of the corporate defendants (Gourmet Deli and Deli & Grocery) are organized
under the laws of the State of New York and operated “a grocery and deli shop” located at 2950
Avenue U, Brooklyn, New York 11229. Compl. ¶¶ 9, 10, 13. First, Gourmet Deli owned and
operated “Avenue U Deli” from the beginning of the relevant time period until August 2023,
when Deli & Grocery “took ownership” and renamed the deli, “Fresh Food Deli & Grill.” Id.
¶ 14. When Deli & Grocery “took ownership” of the deli business, they continued operating the
deli with its predecessor’s wage policies and retained the same employees. Id. ¶ 15.
In December 2018, Gourmet Deli hired plaintiff as a “deli sandwich maker.” Id. ¶ 40. In
August 2023, Deli & Grocery took ownership of the deli and became plaintiff’s employer for the
remainder of his employment, until October 2024. Id. Throughout his employment, plaintiff
was scheduled to work six days per week, Monday through Saturday, for ten hours per day, from
6:00 a.m. to 4:00 p.m., for a total of 60 hours per week. Id. ¶ 41. In addition to his regular
schedule, approximately twice per month, plaintiff was required to work on Sunday, from 6:00
a.m. until 4:00 p.m. Id. Finally, plaintiff alleges that he was required to work additional
unscheduled hours after his regular shifts ended for up to 45 minutes every work day. Id. ¶ 54.
Defendants failed to pay plaintiff for the unscheduled hours (“time shaving claim”). Id.
From 2018 through August 15, 2023, Gourmet Deli paid plaintiff $10 per hour for all
scheduled hours worked. Id. ¶ 42; Pl.’s Damages Calculations (“Damages Calc.”), Dkt. 29-3.2
From August 16, 2023 until the end of his employment, Deli & Grocery paid plaintiff $15 per
hour for all scheduled hours worked. See id. Defendants paid plaintiff in cash each week at the
rates above. See Compl. ¶ 43. Defendants paid plaintiff below the minimum wage, failed to pay
plaintiff an overtime premium for those hours he worked in excess of 40 per week, failed to pay
him for spread-of-hours and never provided plaintiff with a paystub or wage statement. See id.
¶¶ 44-58, 67-83.
Procedural Background
In the Complaint, plaintiff asserts causes of action for failing to pay him minimum and
overtime wages pursuant to the FLSA and NYLL (Counts I, II); failing to provide a wage notice
at the time of hire and detailed paystub information on paydays, under the Wage Theft
Prevention Act (“WTPA”), see N.Y. Labor Law §§ 195(1)(a), 195(3) (Count II); failed to pay
compensation under New York’s spread of hours provision (Count II); and failed to pay sick
leave under New York City’s Earned Safe and Sick Time Act (Count III).
Plaintiff had asserted additional claims for fraudulent filing of tax information returns
(Count IV), breach of contract (Count V), and unjust enrichment (Count VI), but plaintiff has
withdrawn those claims in response to this Court’s Order to Show Cause. See Resp. to Order to
Show Cause, Dkt. 23. Further, since plaintiff’s most recent motion papers do not seek damages
for failure to pay sick leave under the NYLL and New York City’s Earned Safe and Sick Time
Act (Count III), that claim is deemed abandoned. See Moran v. Tacos El Gallo Giro Corp., No.
23-CV-8167, 2025 WL 2813675, at *24 (E.D.N.Y. Oct. 3, 2025) (recommending finding that
2 Although plaintiff does not provide the exact date in August 2023 when Deli & Grocery assumed
ownership over the deli, plaintiff used August 16, 2023 as the operative date for purposes of calculating
damages. See Damages Calc.
plaintiff has abandoned claim that was not included in proposed judgment or damages
calculation); see also Proposed J.; Damages Calc. Similarly, because plaintiff does not request
or advance an argument in support of an award of pre-judgment interest, the undersigned
declines to recommend such an award. See Moran, 2025 WL 2813675, at *24 (collecting cases).
On May 14, 2025, plaintiff commenced this action against defendants Gourmet Deli and
Deli & Grocery. See Dkt. 1. On May 20, 2025, plaintiff served each of the corporate defendants
with the Complaint, via the New York Secretary of State. See Dkts. 8, 9.
Based on the affidavits of service, this Court finds that plaintiff properly served the
corporate defendants. Rule 4 of the Federal Rules of Civil Procedure permits service on a
corporation in a manner authorized by the law of the forum state. See Fed. R. Civ. P. 4(e)(1),
4(h)(1)(A). New York law provides for service of process on a corporation by personally
delivering process to New York’s Secretary of State. See N.Y. Bus. Corp. Law § 306(b)(1). In
addition, Rule 4 provides for service on a “corporation . . . by delivering a copy of the summons
and of the complaint to an officer, a managing agent, or any other agent authorized by
appointment or by law to receive service of process.” Fed. R. Civ. P. 4(h)(1)(B). The New York
Secretary of State qualifies as an “agent authorized by appointment or by law to receive service
of process” under Rule 4. See Dacas v. Duhaney, No. 17-CV-3568, 2023 WL 6297530, at *5
(E.D.N.Y. Sept. 8, 2023), report and recommendation adopted, 2023 WL 6294227 (E.D.N.Y.
Sept. 27, 2023).
Defendants failed to answer the Complaint. On July 1, 2025, the Clerk entered a
Certificate of Default as to both corporate defendants. See Dkt. 15. On August 1, 2025, plaintiff
filed the instant motion for default judgment, which Judge Morrison referred to the undersigned.
On January 13, 2026, defendants failed to appear at a motion hearing despite having been served
with notice of the hearing. See Min. Entry dated January 13, 2026; Aff. of Service, Dkt. 28. To
date, defendants have not responded or otherwise appeared in this action.
Discussion
I. Default Judgment
Under Rule 55 of the Federal Rules of Civil Procedure, there are two steps to entering a
default judgment. See Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 96 (2d Cir. 1993). First, the
Clerk of Court enters the default pursuant to Rule 55(a) by notation of the party’s default on the
Clerk’s record of the case. Fed R. Civ. P. 55(a) (“When a party against whom a judgment for
affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by
affidavit or otherwise, the clerk must enter the party’s default.”). This first step is
nondiscretionary. See United States v. Conolly, 694 F. App’x 10, 12 (2d Cir. 2017). Second,
after the Clerk of the Court enters a defendant’s default, if that party fails to appear or otherwise
move to set aside the default pursuant to Rule 55(c), the plaintiff may apply to the court for a
default judgment. See Fed R. Civ. P. 55(a), (b)(2).
Here, on July 1, 2025, the Clerk of the Court entered a certificate of default against the
defaulting defendants -- Gourmet Deli and Deli & Grocery -- after they failed to appear. See
Dkt. 15. To date, defendants have not appeared or moved to vacate the entry of default.
“Default judgments ‘are generally disfavored and are reserved for rare occasions.’” City
of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 129 (2d Cir. 2011) (quoting Enron Oil,
10 F.3d at 96). Providing guidance as to when a default judgment is appropriate, the Second
Circuit has cautioned that since a default judgment is an extreme remedy, it should only be
entered as a last resort. See Meehan v. Snow, 652 F.2d 274, 277 (2d Cir. 1981). While the
Second Circuit has recognized the “push on a trial court to dispose of cases that, in disregard of
the rules, are not processed expeditiously [and] . . . delay and clog its calendar,” it has held that
the district court must balance that interest with its responsibility to “afford[] litigants a
reasonable chance to be heard.” Enron Oil, 10 F.3d at 95-96. Thus, in light of the “oft-stated
preference for resolving disputes on the merits,” doubts should be resolved in favor of the
defaulting party. See id. at 95. Accordingly, plaintiff is not entitled to a default judgment as a
matter of right simply because defendants are in default. See Erwin DeMarino Trucking Co. v.
Jackson, 838 F. Supp. 160, 162 (S.D.N.Y. 1993) (noting that courts must “supervise default
judgments with extreme care to avoid miscarriages of justice”).
When evaluating a plaintiff’s application for a default judgment, “a court is required to
accept all [] factual allegations as true and draw all reasonable inferences in [plaintiff’s] favor.”
Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009). “Nevertheless, it remains for the court to
consider whether the unchallenged facts constitute a legitimate cause of action, since a party in
default does not admit conclusions of law.” Labarbera v. ASTC Labys., Inc., 752 F. Supp. 2d
263, 270 (E.D.N.Y. 2010) (internal quotations and citations omitted); see also TAGC Mgmt.,
LLC v. Lehman, Lee & Xu Ltd., 536 F. App’x 45, 46 (2d Cir. 2013) (“[P]rior to entering default
judgment, a district court is required to determine whether the plaintiff’s allegations establish the
defendant’s liability as a matter of law.”) (internal quotations and citations omitted).
A default serves as the defendant’s admission that the complaint’s well-pleaded factual
allegations are true. See Mickalis Pawn Shop, 645 F.3d at 137; Finkel, 577 F.3d at 84 (after
default the “court is required to accept all of the [plaintiff’s] [well-pleaded] allegations as true
and draw all reasonable inferences in its favor”). A fact is not considered “well-pleaded,”
however, “if it is inconsistent with [the] other allegations of the complaint or with facts of which
the court can take judicial notice, or is contrary to uncontroverted material in the file of the
case.” Hop Hing Produces Inc. v. Lin Zhang Trading Co., Inc., No. 11-CV-3259, 2013 WL
3990761, at *3 (E.D.N.Y. Aug. 5, 2013) (internal quotations and citations omitted). Ultimately,
whether to grant a motion for default judgment is “left to the [court’s] sound discretion.” Shah v.
New York State Dep’t of Civ. Serv., 168 F.3d 610, 615 (2d Cir. 1999); Div. 1181 Amalgamated
Transit Union-New York Emps. Pension Fund v. D & A Bus Co., 270 F. Supp. 3d 593, 606
(E.D.N.Y. 2017).
Here, the defaulting defendants did not respond to the Complaint despite proper service.
Plaintiff filed affidavits confirming service of the motion for default judgment, this Court’s order
scheduling a hearing on the motion, and the minute entry following the motion hearing. See
Dkts. 20, 26, 28. Defendants have nonetheless failed to respond to plaintiff’s motion for default
judgment or otherwise appear in this action. Accordingly, this Court recommends finding that
defendants’ failure to answer or otherwise respond to the Complaint constitutes an admission of
the factual allegations therein, and now proceeds to consider whether those facts establish
defendants’ liability under federal and state law.
II. Liability
Plaintiff moves for default judgment on his claims under the FLSA and the NYLL. For
the reasons set forth below, this Court concludes that plaintiff sufficiently alleges facts giving
rise to liability.
A. Statute of Limitations
As an initial matter, the Court must determine whether plaintiff’s claims are timely.
Originally, plaintiff requested damages under the NYLL from December 1, 2018 until October
31, 2024. See Pl.’s [Original] Damages Calculations, Dkt. 18-6. In response to this Court’s
show cause order, plaintiff limited his request to May 14, 2019 through October 31, 2024, since
the Complaint was filed on May 14, 2025. See Resp. to Order to Show Cause, Dkt. 23.
The FLSA contains a two-year statute of limitations for non-willful violations, and a
three-year statute of limitations for willful violations. See 29 U.S.C. § 255(a). “When a
defendant defaults, the violation is considered ‘willful’ and the three-year statute of limitations
applies.” Rodriguez v. Queens Convenience Deli Corp., No. 09-CV-1089, 2011 WL 4962397, at
*2 (E.D.N.Y. Oct. 18, 2011) (citation omitted); see also Gunawan v. Sake Sushi Rest., 897 F.
Supp. 2d 76, 87 (E.D.N.Y. 2012). Because defendants have defaulted, a three-year statute of
limitations applies here.
Unlike the FLSA, “[a]ny action to recover upon a liability imposed by NYLL’s Articles 6
and 19 must be commenced within six years.” Martinez v. 2009 Bamkp Corp., No. 18-CV-7414,
2019 WL 7708607, at *4 (S.D.N.Y. Dec. 10, 2019) (quotation marks and citation omitted),
report and recommendation adopted, 2020 WL 409691 (S.D.N.Y. Jan. 23, 2020); see also N.Y.
Lab. Law §§ 198(3), 663(3). Both statutes of limitations, and thus the period from which a
plaintiff can recover under the FLSA and the NYLL, are calculated from the filing of the
complaint. See Duchitanga v. 43 Ave Top N’ Quality Corp., No. 17-CV-1145, 2021 WL
7906539, at *6-7 (E.D.N.Y. Sept. 13, 2021).
Since plaintiff filed the Complaint on May 14, 2025, plaintiff may recover damages
arising out of his employment going back six years under the NYLL, or three years under federal
law. See Luna v. Gon Way Constr., No. 16-CV-1411, 2017 WL 835321, at *9 (E.D.N.Y. Feb.
14, 2017), report and recommendation adopted, 2017 WL 835174 (E.D.N.Y. Mar. 2, 2017). The
Court adopts the relevant period for calculating damages as now proposed by plaintiff. Here,
plaintiff seeks to recover damages for NYLL violations from the period May 14, 2019 through
October 31, 2024 (within the six-year limitations period from the filing of the initial Complaint
on May 14, 2025) to the end of his employment in October 2024, and for FLSA violations from
May 14, 2022 to October 2024 (within the three-year limitations period).
B. FLSA
“The FLSA governs minimum wages, maximum hours, and other policies and practices
affecting employees and employers.” Thompson v. Hyun Suk Park, No. 18-CV-0006, 2019 WL
1299194, at *2 (E.D.N.Y. Mar. 5, 2019), report and recommendation adopted, 2019 WL
1298563 (E.D.N.Y. Mar. 20, 2019). To demonstrate entitlement to wage and overtime
protections under the FLSA, a plaintiff must show that (1) an employer-employee relationship
exists and (2) the employment falls under the FLSA’s individual or enterprise coverage
provisions. See Baizan Guerrero v. 79th St. Gourmet & Deli Inc., No. 18-CV-04761, 2019 WL
4889591, at *4 (E.D.N.Y. Sept. 10, 2019), report and recommendation adopted, 2019 WL
4887914 (E.D.N.Y. Oct. 3, 2019); see also 29 U.S.C. § 206(a)(1) (providing for minimum wages
for qualifying employees); id. § 207(a)(1) (providing for overtime wages for qualifying
employees).
1. Employer/Employee Relationship
The FLSA broadly defines an “employer” as “any person acting directly or indirectly in
the interest of an employer in relation to an employee,” 29 U.S.C. § 203(d), and a “person” as
“an individual, partnership, association, corporation, business trust, legal representative, or any
organized group of persons,” id. §§ 203(a); 203(g) (defining “employ” as “to suffer or permit to
work”). The FLSA further defines the term “employee” as “any individual employed by an
employer.” Id. § 203(e)(1). Absent a statutory exemption, employees are protected by the FLSA
if they worked for a covered employer. “Because the statute defines employer in such broad
terms, it offers little guidance on whether a given individual is or is not an employer.” Herman
v. RSR Sec. Servs. Ltd., 172 F.3d 132, 139 (2d Cir. 1999).
“Courts afford the term employer “an expansive definition with ‘striking breadth.’”
Ortega v. Frozen Deli & Grocery Inc., No. 24-CV-1231, 2024 WL 4751732, at *5 (S.D.N.Y.
Oct. 22, 2024) (quoting Perez Garcia v. Hirakegoma Inc., No. 17-CV-7608, 2020 WL 1130765,
at *5 (S.D.N.Y. Mar. 9, 2020)), report and recommendation adopted, 2024 WL 4859055
(S.D.N.Y. Nov. 21, 2024). To determine whether a party qualifies as an “employer” under the
FLSA, “the overarching concern” that courts consider is “whether the alleged employer
possessed the power to control the workers in question, with an eye to the ‘economic reality’
presented by the facts of each case.” Herman, 172 F.3d at 139 (quoting Goldberg v. Whitaker
House Co-op., 366 U.S. 28, 33 (1961)) (internal citation omitted); see also Baizan Guerrero,
2019 WL 4889591, at *4.
Plaintiff’s unopposed allegations are sufficient to conclude that defendants each
employed plaintiff under the definition of the FLSA. Plaintiff sufficiently alleges that Gourmet
Deli and Deli & Grocery each owned and operated the deli at which plaintiff worked, and
subjected their employees to unlawful wage policies. See Compl. ¶¶ 15, 16, 40. Thus, this Court
finds that Gourmet Deli and Deli & Grocery each employed plaintiff under the definition of the
FLSA. See Ortega, 2024 WL 4751732, at *6 (finding similar allegations sufficient to find that
corporation was employer, particularly where by defaulting, defendants admitted their status);
Sarmiento Perez v. Comhar Grp. LLC, No. 19-CV-0964, 2020 WL 1364908, at *3-4 (E.D.N.Y.
Mar. 6, 2020), report and recommendation adopted, 2020 WL 1332200 (E.D.N.Y. Mar. 23,
2020); Payamps v. M&M Convenience Deli & Grocery Corp., No. 16-CV-4895, 2019 WL
8381264, at *7 (E.D.N.Y. Dec. 9, 2019).
2. Whether Plaintiff’s Employment was Covered by the FLSA
Next, the Court must determine whether plaintiff’s employment falls under the FLSA’s
individual or enterprise coverage provisions. The FLSA’s minimum wage and overtime
provisions apply only to those “employees (1) who are personally ‘engaged in [interstate]
commerce or in the production of goods for [interstate] commerce’ (so-called ‘individual
coverage’), or (2) who are ‘employed in an enterprise engaged in [interstate] commerce or in the
production of goods for [interstate] commerce’ (so-called ‘enterprise coverage’).” Shim v.
Millennium Grp., No. 08-CV-4022, 2009 WL 211367, at *2 (E.D.N.Y. Jan. 28, 2009) (quoting
29 U.S.C. §§ 206(a), 207(a)); see Jacobs v. N.Y. Foundling Hosp., 577 F.3d 93, 96 (2d Cir.
2009) (per curiam). To properly plead enterprise coverage, a plaintiff must demonstrate that his
employer has “annual gross volume of sales made or business done [of] not less than $500,000”
and has two or more employees regularly and recurrently engaged in commerce or the
production of goods for commerce, including “handling, selling, or otherwise working on goods
or materials that have been moved in or produced for commerce.” 29 U.S.C. § 203(s)(1)(A)(i)-
(ii); see 29 C.F.R. § 779.238.
Plaintiff’s allegations are sufficient to conclude that defendants are subject to the FLSA.
First, plaintiff claims that defendants were directly engaged in interstate commerce. See, e.g.,
Compl. ¶¶ 11-13. Second, plaintiff alleges that defendants had an annual gross volume of sales
and business exceeding $500,000 during the relevant period. See id. ¶ 11. Courts in this District
have held that conclusory allegations similar to those made here with respect to enterprise
coverage are sufficient when it was otherwise “reasonable to infer that the myriad goods
necessary to operate” the enterprise was engaged in interstate commerce. See Fermin v. Las
Delicias Peruanas Rest., Inc., 93 F. Supp. 3d 19, 33 (E.D.N.Y. 2015); see also Santos v. Cancun
& Cancun Corp., No. 21-CV-192, 2022 WL 1003812, at *4 (E.D.N.Y. Feb. 17, 2022); Wuzi Jiao
v. Kitaku Japanese Rest., Inc., No. 16-CV-2694, 2020 WL 2527588, at *5-6 (E.D.N.Y. Mar. 13,
2020), report and recommendation adopted, 2020 WL 2523109 (E.D.N.Y. May 18, 2020).
Further, courts in this District have routinely inferred, even absent specific allegations, that
companies engaged in the deli/supermarket industry are engaged in interstate commerce. See
Pena v. Super Econ. One Way Supermarket Corp., No. 20-CV-3060, 2021 WL 4755603, at *5
(E.D.N.Y. Sept. 8, 2021) (“Given Super Economics’ annual sales, it can be inferred that some of
the materials sold in the supermarket originated in interstate commerce.”), report and
recommendation adopted, 2021 WL 4398204 (E.D.N.Y. Sept. 25, 2021); Baizan Guerrero, 2019
WL 4889591, at *5 (“it is reasonable to infer that the operation of a New York deli with over
$500,000.00 in annual sales” is subject to enterprise coverage); Kliger v. Liberty Saverite
Supermarket Inc., No. 17-CV-2520, 2018 WL 4782342, at *3 (E.D.N.Y. Sept. 17, 2018), report
and recommendation adopted as modified, 2018 WL 4783964 (E.D.N.Y. Oct. 3, 2018).
Accordingly, this Court recommends finding that the allegations in plaintiff’s Complaint
are sufficient to conclude that plaintiff’s employment falls under the FLSA’s protections.
C. NYLL
As with the FLSA, the NYLL broadly defines an “employer.” The NYLL defines an
employer as a “person, corporation, limited liability company, or association employing any
individual in any occupation, industry, trade, business or service.” N.Y. Lab. Law § 190(3). An
employee is defined as “any person employed for hire by an employer in any employment.” Id.
§ 190(2). Because these definitions are similar to the FLSA’s definitions, “courts use the same
tests to determine . . . employment under both the NYLL and the FLSA.” Khan v. Nyrene, Inc.,
No. 18-CV-557, 2020 WL 1931282, at *5 (E.D.N.Y. Mar. 11, 2020) (internal quotation marks
and citation omitted), report and recommendation adopted, 2020 WL 1929066 (E.D.N.Y. Apr.
21, 2020). Accordingly, the Court finds that plaintiff was employed by each of the corporate
defendants under the NYLL. See Mondragon v. Keff, No. 15-CV-2529, 2019 WL 2551536, at
*7-9 (S.D.N.Y. May 31, 2019), report and recommendation adopted, 2019 WL 2544666
(S.D.N.Y. June 20, 2019).
D. Joint and Several Liability
In addition to each corporate defendant being liable for the violations occurring during its
own tenure as owner/operator, plaintiff further argues that Gourmet Deli and Deli & Grocery are
jointly and severally liable for violations occurring between May 14, 2019 and August 2023,
before Deli & Grocery purchased the business. See Supp. Mem. at 1-2, Dkt. 29.
Generally, “a successor is not responsible for the liabilities of its predecessor.” Chen v.
DG & S NY, Inc., 406 F. Supp. 3d 216, 222 (E.D.N.Y. 2016). However, in certain
circumstances, a court may find that a successor has either expressly or impliedly assumed the
predecessor’s liability. Courts have analyzed FLSA claims under a “substantial continuity” test
and NYLL claims under a New York common law standard in determining whether a defendant
may be held liable for a previous employer’s labor law violation. See Nguyen v. Pho Vietnam 87
Corp., No. 23-CV-4298, 2025 WL 564546, at *6 (S.D.N.Y. Jan. 31, 2025), report and
recommendation adopted, 2025 WL 564546 (S.D.N.Y. Jan. 31, 2025); Duchitanga, 2021 WL
7906539, at *8.
“The substantial continuity test ‘focuses on whether the new company has acquired
substantial assets of its predecessor and continued, without interruption or substantial change, the
predecessor’s business operations.’”3 Chen, 406 F. Supp. 3d at 223 (quoting Bautista v. Beyond
Thai Kitchen, Inc., No. 14-CV-4335, 2015 WL 5459737, at *5 (S.D.N.Y. Sept. 17, 2015)).
Under the substantial continuity test, courts generally consider the following factors:
(1) whether the successor company had notice of the charge or pending lawsuit
prior to acquiring the business or assets of the predecessor; (2) the ability of the
predecessor to provide relief; (3) whether there has been a substantial continuity
of business operations; (4) whether the new employer uses the same [location];
(5) whether he uses the same or substantially the same work force; (6) whether he
uses the same or substantially the same supervisory personnel; (7) whether the
same jobs exist under substantially the same working conditions; (8) whether he
uses the same machinery, equipment, and methods of production; and (9) whether
he produces the same product.
Duchitanga, 2021 WL 7906359, at *8; see Nguyen, 2025 WL 564546, at *6. No single factor is
dispositive, but the first two factors are the “more significant.” Duchitanga, 2021 WL 7906359,
at *8. Ultimately, the determination is based on the totality of circumstances. Id. at *9.
Here, plaintiff argues that Deli & Grocery had notice of Gourmet Deli’s violations of the
FLSA, and potential liability therefor, because it retained the same employees and continued
Gourmet Deli’s unlawful payroll practices after purchasing the business.4 See Compl. ¶ 15.
Accordingly, Deli & Grocery was or should have been aware of the existence of the labor
violation and constructive notice is sufficient for purposes of substantial continuity in the FLSA
context. Because plaintiff’s allegations are sufficient to show constructive knowledge, plaintiff
has satisfied the first critical factor, notice. See Duchitanga, 2021 WL 7906359, at *10; Ji Li v.
New Ichiro Sushi, Inc., No. 14-CV-10242, 2020 WL 2094095, at *5 (S.D.N.Y. Apr. 30, 2020),
aff'd, 2021 WL 6105491 (2d Cir. Dec. 21, 2021); Rotthoff v. New York State Cath. Health Plan,
3 Although the Second Circuit has not ruled directly on whether the substantial continuity test applies to
FLSA claims, courts in this District have applied the test to such claims. See Duchitanga, 2021 WL
7906539, at *8 (collecting cases); see also Nguyen, 2025 WL 564546, at *6 & n.1.
4 In addition, plaintiff has submitted a judgment against Gourmet Deli dated March 11, 2020, due to its
non-compliance with the Worker’s Compensation Board of the State of New York. See Judgment dated
March 11, 2020, Supreme Court of the State of New York, County of Queens, Dkt. 29-1.
Inc., No. 19-CV-04027, 2020 WL 5763862, at *7 (E.D.N.Y. Sept. 28, 2020).
As to the second factor, plaintiff claims that “although [] public inquiry shows
Predecessor Defendant’s registration status remains active, Predecessor Defendant is no longer in
operation. With the deli being its sole business, it was shorn of all of its assets when it sold the
business to the Successor Defendant.” Pl. Supp. Mem. at 5. However, plaintiff did not raise
these allegations in the Complaint and he has not supplemented the record to support his claim
that Gourmet Deli’s sale of the deli left it without any source of income or assets from which it
could satisfy a judgment against it. This factor, therefore, is neutral. See Duchitanga, 2021 WL
7906359, at *11 & n.20 (noting that predecessor corporation is listed as being in active status
with the Secretary of State); Xue Ming Wang v. Abumi Sushi Inc., 262 F. Supp. 3d 81, 95
(S.D.N.Y. 2017).
Otherwise, the remaining factors weigh in favor of finding successor liability. Plaintiff
alleges that even after the business was sold from Gourmet Deli to Deli & Grocery, the deli
remained at the same location, used the same equipment, employed the same people, including
plaintiff, and continued to offer substantially the same services and products. See Nguyen, 2025
WL 564546, at *7; Duchitanga, 2021 WL 7906359, at *11; Chen, 406 F. Supp. 3d at 224; see
also Pareja v. 184 Food Corp., No. 18-CV-05887, 2021 WL 3109621, at *9 & n.9 (S.D.N.Y.
July 22, 2021), report and recommendation adopted, Pareja v. Food Corp., 2021 WL 3501229
(S.D.N.Y. Aug. 9, 2021). In addition, plaintiff alleges that the conditions of his employment did
not change despite the change in ownership, including the unlawful pay practices at issue. See
id. After balancing all of the relevant factors, the Court finds that plaintiff’s allegations are
sufficient to establish Deli & Grocery’s successor liability under the FLSA.
However, plaintiff has not adequately alleged successor liability under the stricter
common law test for NYLL claims. Under the common law test applicable to NYLL claims, “a
business buyer is liable for the seller’s debts only when “‘(1) a buyer . . . formally assumes a
seller’s debts; (2) [the] transactions [are] undertaken to defraud creditors; (3) a buyer . . . de facto
merged with a seller, [or] (4) a buyer . . . is a mere continuation of the seller.’” Ngyuen, 2025
WL 564546, at *6 (quoting Cargo Partner AG v. Albatrans, Inc., 352 F.3d 41, 45 (2d Cir.
2003)).
Here, plaintiff does not allege that Deli & Grocery assumed the tort liability of Gourmet
Deli or that Gourmet Deli sold the business to fraudulently avoid liability. See Duchitanga, 2021
WL 7906359, at *12. Nor does plaintiff allege that there was a merger of the two corporations or
that the company has continued under the same ownership. See id. (“de facto merger and mere
continuation . . . both require continuity of ownership”); Ramirez v. H.J.S. Car Wash Inc., No.
11-CV-2664, 2013 WL 1437600, at *5 (E.D.N.Y. Apr. 9, 2013) (“successor liability therefore
cannot be imposed in the absence of continuity of ownership”); see also New York v. Nat’l Serv.
Indus., Inc., 460 F.3d 201, 212 (2d Cir. 2006) (requiring continuity of ownership for de facto
merger under New York common law); Cargo Partner AG v. Albatrans, Inc., 352 F.3d 41, 46
(2d Cir. 2003) (“the doctrine of de facto merger in New York does not make a corporation that
purchases assets liable for the seller’s contract debts absent continuity of ownership”).
Accordingly, plaintiff cannot demonstrate that Deli & Grocery is jointly and severally liable for
Gourmet Deli’s NYLL violations.
Thus, the relevant time period for Deli & Grocery’s successor wage and hour liability
under the FLSA, for which it is jointly and severally liable with Gourmet Deli, is May 14, 2022
through the end of plaintiff’s employment for Gourmet Deli in August 2023.
E. Minimum Wages
Both the FLSA and the NYLL require employers to pay employees at a minimum hourly
rate. See 29 U.S.C. § 206(a)(1); N.Y. Lab. Law § 652. The applicable minimum wage under the
NYLL for a New York City employer with ten or fewer employees5 was $13.50 per hour in
2019, $15.00 per hour from December 31, 2019 until December 31, 2023 and $16.00 per hour
for 2024. See N.Y. Lab. Law § 652(1)(a)(ii). Given that the minimum wage under the NYLL is
higher than that of the FLSA for all relevant time periods,6 this Court analyzes plaintiff’s
minimum wage entitlement based on the New York City minimum wage. See 29 C.F.R. § 778.5;
Sanchez v. Ms. Wine Shop Inc., 643 F. Supp. 3d 355, 376 (E.D.N.Y. 2022); Fermin, 93 F. Supp.
3d at 43.
To determine whether plaintiff was paid the applicable minimum wage, the Court must
first determine the plaintiff’s regular hourly wage rate. See Chen v. Oceanica Chinese Rest.,
Inc., No. 13-CV-4623, 2023 WL 2583856, at *11 (E.D.N.Y. Mar. 21, 2023); Xin Long Lin v.
New Fresca Tortillas, Inc., No. 18-CV-3246, 2019 WL 3716199, at *3 (E.D.N.Y. May 1, 2019),
report and recommendation adopted, 2019 WL 3714600 (E.D.N.Y. May 28, 2019). Under the
FLSA, the regular rate is defined “as the hourly rate actually paid the employee for the normal,
non-overtime workweek for which he [or she] is employed” and is “drawn from what happens
under the employment contract.” 29 C.F.R. § 778.108. Because plaintiff was compensated on
an hourly basis, the regular hourly rate is straightforward. The compensation paid to plaintiff for
his “normal, nonovertime workweek” of 40 hours per week is $10.00 per hour from the
5 In the absence of any information regarding the size of the employer’s workforce, the Court applies the
rate for small employers. See Ortiz v. Red Hook Deli & Grocery 2015 Corp., No. 17-CV-7095, 2019 WL
4739047, at *7 n.6 (E.D.N.Y. June 12, 2019), report and recommendation adopted, 2019 WL 4741626
(E.D.N.Y. Sept. 26, 2019).
6 The applicable federal minimum wage rate was $7.25. See 29 U.S.C. § 206(a)(1)(C).
commencement of his employment until August 16, 2023, and $15.00 per hour thereafter. See
Holder v. G&A Flaggers LLC, No. 22-CV-7227, 2025 WL 1708086, at *9 (E.D.N.Y. Mar. 5,
2025); Maldonado v. Papadopoulos, No. 20-CV-6850, 2021 WL 5363016, at *4-5 (S.D.N.Y.
July 17, 2021) (basing plaintiffs’ regular hourly wages on the information provided in plaintiffs’
affidavits), report and recommendation adopted as modified, 2021 WL 4596535 (S.D.N.Y. Oct.
6, 2021).
Since plaintiff’s regular rate was lower than the applicable minimum wage from the
commencement of his employment until August 15, 2023, and again during 2024, the Court
recommends granting plaintiff’s claim for unpaid minimum wages.
F. Overtime Wages
Under the FLSA and the NYLL, an employee must “be compensated at a rate of no less
than one and one-half times the regular rate of pay for any hours worked in excess of forty per
week.” Nakahata v. New York-Presbyterian Healthcare Sys., Inc., 723 F.3d 192, 200 (2d Cir.
2013) (citing 29 U.S.C. § 207(a) and N.Y. Comp. Codes R. & Regs., tit. 12 § 142-2.2). Here,
plaintiff alleges that he regularly worked for defendants for more than 40 hours per week, but
was not paid the requisite premium for those overtime hours. In addition, since plaintiff was
already working more than 40 hours per week according to his regular schedule, he was entitled
to overtime pay for the additional 45 minutes per day he worked unpaid. See Lopez v. Thermo
Tech Mech., Inc., No. 20-CV-9113, 2023 WL 3756883, at *5-6 (S.D.N.Y. May 31, 2023), report
and recommendation adopted, 2022 WL 4121480 (E.D.N.Y. Sept. 9, 2022); Cuanetl v. Café H
Inc., No. 21-CV-4316, 2022 WL 4124766, at *4 (E.D.N.Y. Aug. 9, 2022). Thus, plaintiff has
sufficiently alleged claims against the defendants for unpaid overtime under the FLSA and the
NYLL.
G. Spread-of-Hours Premium
Another area in which the NYLL differs from the FLSA is the NYLL’s requirement that
an employer pay employees a “spread-of-hours” premium that is equal to “one additional hour of
pay at the basic minimum hourly rate” for each day an employee works in excess of ten hours.
See N.Y. Comp. Codes R. & Regs. Tit. 12, § 146-1.6; see also id. § 142-2.4 (non-hospitality
workers). For hospitality workers, the spread of hours mandate applies “regardless of a given
employee’s regular rate of pay.” Id. § 146-1.6(d). “A plaintiff sufficiently establishes an
employer’s liability for failure to provide spread of hours pay when he alleges that he worked in
excess of ten hours on a given day but did not receive spread of hours pay.” See Martinez v.
Golden Flow Dairy Farms Inc., No. 21-CV-2421, 2025 WL 3769328, at *7 (E.D.N.Y. Dec. 31,
2025) (internal quotation marks and citation omitted).
Plaintiff seeks recovery for spread of hours compensation for one hour’s pay at the basic
minimum hourly rate for each date that he worked more than ten hours. As plaintiff alleges that
he worked for defendants more than ten hours per day throughout his employment, but was not
paid spread of hours wages, he has sufficiently alleged a claim for relief.
H. Wage Theft Prevention Act
The NYLL’s WTPA requires that employers provide employees, at the time of hiring, a
notice that sets forth, among other things, “the rate or rates of pay and basis thereof, whether paid
by the hour, shift, day, week, salary, piece, commission or other; allowances, if any, claimed as
part of the minimum wage . . . ; the regular pay day . . .; the name of the employer; . . . [and] the
regular hourly rate and overtime rate of pay.” N.Y. Lab. Law § 195(1)(a). In addition, section
195(3) of the NYLL obligates an employer to “furnish each employee with a statement with
every payment of wages, listing . . . the dates of work covered by that payment of wages; . . . rate
or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece,
commission, or other gross wages; deductions; allowances, if any, claimed as part of the
minimum wage; . . . and net wages.” N.Y. Lab. Law § 195(3).
However, the Second Circuit has found allegations of technical violations of the WTPA’s
wage notice and statement requirements to be insufficient, on their own, to confer Article III
standing. Rather, a plaintiff must allege actual injuries suffered as a result of the alleged wage
notice and wage statement violations. See Guthrie v. Rainbow Fencing Inc., 113 F.4th 300, 305
(2d Cir. 2024). Specifically, “a plaintiff must show some causal connection between the lack of
accurate notices and the [injury] or harm” to plausibly allege a WTPA violation. See id. The
plaintiff must “link the general harms an employee might experience to any harms that [the
plaintiff] did, in fact, experience.” Id. at 311 (quoting Maddox v. Bank of New York Mellon Tr.
Co., N.A., 19 F.4th 58, 64 (2d Cir. 2021) (emphasis in original)). For example, a plaintiff may
establish standing where he alleges that “inaccurate or noncompliant notices prevented the
employee from obtaining full payment of wages in a timely fashion.” Guthrie, 113 F.4th at 309.
Plaintiff sufficiently alleges that the defendants failed to provide him with the wage
notice required by the WTPA, section 195(1)(a) of the NYLL. In addition, the Complaint
sufficiently alleges that defendants failed to provide plaintiff with a proper wage statement, in
violation of section 195(3) of the NYLL. In this case, plaintiff has explained how the failure to
provide hiring and wage notices “led to [] a tangible injury.” See Guthrie v. Rainbow Fencing
Inc., No. 21-CV-5929, 2023 WL 2206568, at *6 (E.D.N.Y. Feb. 24, 2023), aff’d, 113 F.4th 300
(2d Cir. 2024). For example, plaintiff alleges that if defendants provided plaintiff with proper
wage statements, breaking down regular and overtime hours, and listing plaintiff’s regular and
overtime rates, plaintiff would have discovered that his rights were violated. Compl. ¶¶ 72-73.
Plaintiff, therefore, alleges more than a bare statutory violation and has adequately stated claims
for violations of the WTPA by the defendants. See Abe v. Yamaguchi & Friends, Inc., No. 22-
CV-3164, 2024 WL 3875779, at *10 (E.D.N.Y. Aug. 20, 2024) (“allegations that an employer’s
WTPA violations hindered an employee from vindicating her rights constitute the sort of
‘downstream consequences’ that can transform an informational injury into one that passes
constitutional muster”); Gunthorpies v. I.M. Grp., LLC, No. 21-CV-5140, 2024 WL 2031191, at
*8 (E.D.N.Y. Apr. 11, 2024), report and recommendation adopted, 2024 WL 2022688
(E.D.N.Y. May 7, 2024).
III. Relief
Although the allegations of a complaint pertaining to liability are deemed admitted upon
entry of a default judgment, allegations relating to damages are not. See Greyhound
Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992) (citing Flaks v.
Koegel, 504 F.2d 702, 707 (2d Cir. 1974)). “Because the extent of the damages pleaded by a
plaintiff is not deemed to be established by the default, the Court must conduct ’an inquiry in
order to ascertain the amount of damages with reasonable certainty.’” Trustees of Loc. 7 Tile
Indus. Welfare Fund v. All Flooring Sols., LLC, No. 19-CV-126, 2020 WL 9814088, at *3
(E.D.N.Y. Feb. 12, 2020) (quoting Credit Lyonnais Secs. (USA), Inc. v. Alcantara, 183 F.3d 151,
155 (2d Cir. 1999)). A court may make this determination based upon evidence presented at a
hearing or upon a review of detailed affidavits and documentary evidence. See Fed. R. Civ. P.
55(b)(2); Action S.A. v. Marc Rich & Co., Inc., 951 F.2d 504, 508 (2d Cir. 1991). Plaintiff must
establish that he is entitled to the damages sought for violations of the FLSA and NYLL.
“Under both the FLSA and NYLL, an employer is required to maintain records of the
wages, hours, and persons employed by him [or her].” Lu Nan Fan v. Jenny & Richard’s Inc.,
No. 17-CV-6963, 2019 WL 1549033, at *9 (E.D.N.Y. Feb. 22, 2019), report and
recommendation adopted, 2019 WL 1547256 (E.D.N.Y. Apr. 9, 2019) (internal quotation marks
and citation omitted). Where, as here, defaulting defendants fail to produce the requisite records,
a plaintiff’s sworn statements “containing information as to hours worked and rates of pay based
on estimation and recollection, even if the information provided is general and not detailed,”
satisfies a plaintiff’s burden of establishing how many hours he or she worked and how much he
or she was paid. See Nikolaeva v. Home Attendant Servs. of Hyde Park, No. 15-CV-6977, 2017
WL 3491964, at *3 (E.D.N.Y. July 19, 2017) (internal quotation marks and citation omitted),
report and recommendation adopted, 2017 WL 3493136 (E.D.N.Y. Aug. 14, 2017); see also
Herrera v. Tri-State Kitchen & Bath, Inc., No. 14-CV-1695, 2015 WL 1529653, at *8 (E.D.N.Y.
Mar. 31, 2015) (relying on plaintiffs’ sworn declarations as to rates of pay and estimates of hours
worked). “Nevertheless, the Court must ensure that plaintiff’s approximations and estimates are
reasonable and appropriate.” Espinoza v. La Oficina Bar Corp., No. 20-CV-1237, 2022 WL
987429, at *15 (E.D.N.Y. Mar. 1, 2022), report and recommendation adopted as modified, 2022
WL 985836 (E.D.N.Y. Mar. 31, 2022); Fan, 2019 WL 1549033, at *9.
Plaintiff has submitted his own sworn affidavit describing the dates of his employment,
along with hours worked and the amount of wages he received. See Mogollan Aff. ¶¶ 3-7. In
light of defendants’ default, plaintiff’s evidence on damages stands uncontroverted, and plaintiff
has provided a sufficient basis upon which to determine damages.7
A. Unpaid Minimum Wages
As discussed above, plaintiff was paid below minimum wage for most of his
7 Plaintiff does not seek an award of pre-judgment interest or attorney’s fees. See Affirmation of C.K.
Lee (“Lee Aff.”) ¶ 27, Dkt. 18; Mogollan Aff. ¶ 16; Prop. J., Dkt. 29-4.
employment. From May 14, 2019 to August 15, 2023, plaintiff was paid $10 per hour -- less
than the applicable $13.50 per hour minimum wage in 2019 and $15 per hour minimum wage
from 2020 to 2023. From August 16, 2023 through December 31, 2023, plaintiff was paid $15
per hour in accordance with the applicable minimum wage. However, from January 1, 2024 to
October 31, 2024, plaintiff was still paid $15 per hour -- less than the $16 per hour minimum
wage applicable to 2024. Accordingly, based upon the hours worked and applicable wage rates,
this Court recommends awarding damages to plaintiff for unpaid minimum wages as follows:
Unpaid Minimum Wages
Gourmet Deli8
Period Weeks Paid Minimum Min. Hours Total
Wage Wage Wage -
Paid
Wage
5/14/19 - 12/31/19 339 $10 $13.5010 $3.50 40 $4,620.00
1/1/20 - 12/31/20 52 $10 $15 $5 40 $10,400.00
1/1/21 - 12/31/21 52 $10 $15 $5 40 $10,400.00
1/1/22 - 12/31/22 52 $10 $15 $5 40 $10,400.00
1/1/23 - 8/15/23 32 $10 $15 $5 40 $6,400.00
Subtotal $42,220.00
Deli & Grocery
8/16/23 - 12/31/23 20 $15 $15 $0 40 0.00
1/1/24 - 10/31/24 43 $15 $16 $1 40 $1,720.00
Subtotal $$1,720.00
Combined Total $43,940.00
B. Unpaid Overtime Compensation
Under the FLSA and the NYLL, an employer must pay an employee overtime
8 The Court calculates damages separately for the time plaintiff worked for Gourmet Deli (predecessor
employer) and then for Deli & Grocery (successor employer).
9 The Court calculates the relevant time period by rounding the number of weeks worked to the nearest
whole number.
10 The correct minimum wage rate during 2019 is $13.50, rather than $15.00 (Dkt. 29-3).
compensation at 1.5 times the employee’s regular rate of pay for each hour worked in excess of
forty hours per week. See 29 U.S.C. § 207(a)(1); 29 C.F.R. § 778.110(a); N.Y. Comp. Codes R.
& Regs. tit. 12, § 146-1.4; see also Nakahata, 723 F.3d at 200 (noting that the NYLL adopts the
FLSA’s definition of overtime into the NYLL). “An employee’s appropriate overtime rate is
calculated by multiplying [an employee’s] regular hourly rate (or the minimum wage rate, if his
regular hourly rate falls below the minimum wage) by one and one-half.” Baizan Guerrero,
2019 WL 4889591, at *8 (internal quotation marks and citation omitted).
Here, plaintiff sufficiently demonstrates that the defaulting defendants did not pay him
any overtime compensation during his employment. See Mogollan Aff. ¶ 5. Plaintiff states that,
during a typical week, he worked 60 hours per week, pursuant to his regular schedule or 20
overtime hours per week (60 total hours - 40 hour workweek = 20 hours). See id. ¶ 4. In
addition, twice per month, defendants required him to work a seventh day for 10 hours per day.
Id. Thus, plaintiff should have received approximately 25 hours of overtime pay per week for
his scheduled hours.11
Accordingly, based upon the scheduled hours worked and applicable overtime wage rate,
this Court recommends awarding damages to plaintiff for unpaid overtime wages as follows:
11 Even though plaintiff worked approximately 20 overtime hours during a typical six-day workweek,
plaintiff also alleges that he worked a seventh day twice per month, for an additional 10 overtime hours
each seventh day, for a total of 20 additional overtime hours per month. For purposes of calculating his
unpaid overtime hours, plaintiff spread the additional 20 overtime hours over the course of four weeks.
Specifically, plaintiff calculated five additional overtime hours per week by dividing 20 additional
overtime hours worked each month by four weeks. Dkt. 29-3. Plaintiff then added five hours to the 20
overtime hours he typically worked per week for a total average of 25 overtime hours per week. Dkt. 29-
3.
Unpaid Overtime Wages
Gourmet Deli
Period Weeks Paid Overtime Overtime - Overtime Total
Wage Rate Paid Wage Hours
5/14/19 - 12/31/19 33 $10.00 $20.2512 $10.25 25 $8,456.2513
1/1/20 - 12/31/20 52 $10.00 $22.5014 $12.50 25 $16,250.00
1/1/21 - 12/31/21 52 $10.00 $22.50 $12.50 25 $16,250.00
1/1/22 - 12/31/22 52 $10.00 $22.50 $12.50 25 $16,250.00
1/1/23 - 8/15/23 32 $10.00 $22.50 $12.50 25 $10,000.00
Subtotal $67,206.25
Deli & Grocery
8/16/23 - 12/31/23 20 $15.00 $22.50 $7.50 25 $3,750.00
1/1/24 - 10/31/24 43 $15.00 $24.0015 $9.00 25 $ 9,675.00
Subtotal $13,425.00
Combined Total $80,631.25
In addition to defendants’ failure to pay an overtime premium for plaintiff’s scheduled
overtime hours, defendants failed to pay plaintiff entirely for 45 minutes per day past his regular
schedule. See Mogollan Aff. ¶ 6. Accordingly, the Court calculates overtime wages for time-
shaved overtime as follows:
Time Shaving
Gourmet Deli
Period Weeks Overtime Rate Overtime Hours Total
5/14/19 - 12/31/19 33 $20.25 4.8816 $3,261.06
1/1/20 - 12/31/20 52 $22.50 4.88 $5,709.60
1/1/21 - 12/31/21 52 $22.50 4.88 $5,709.60
1/1/22 - 12/31/22 52 $22.50 4.88 $5,709.60
1/1/23 - 8/15/23 32 $22.50 4.88 $3,513.60
Subtotal $23,903.46
12 $13.50 (applicable minimum wage rate) x 1.5 = $20.25.
13 ($20.25 (unpaid overtime amount) - $10 (amount paid)) x 25 overtime hours x 33 weeks = $8,456.53.
14 $15.00 (applicable minimum wage rate) x 1.5 = $22.50.
15 $16.00 (applicable minimum wage rate) x 1.5 = $24.
16 Plaintiff correctly calculated 4.88 overtime hours per week based on plaintiff’s affidavit stating that he
worked an extra 45 minutes per workday, he regularly worked six days per week, and twice per month, he
worked a seventh day (((45 minutes x 6 days per week) + (45 minutes x 2 days per month / 4 weeks)) =
292.50 minutes per week); 292.50 minutes / 60 = 4.88 hours). Mogollan Aff. ¶¶ 4, 6.
Deli & Grocery
8/16/23 - 12/31/23 20 $22.50 4.88 $2,196.00
1/1/24 - 10/31/24 43 $24.00 4.88 $5,036.16
Subtotal $7,232.16
Combined Total $31,135.62
C. Spread-of-Hours Compensation
The NYLL provides that if the length of time between the beginning and end of an
employee’s workday (or the employee’s “spread of hours”) surpasses ten hours, the employer
must pay the employee an additional hour of pay at the minimum wage. See Gamero v. Koodo
Sushi Corp., 272 F. Supp. 3d 481, 500 (S.D.N.Y. 2017); see also Pineda v. Tokana Café Bar
Restaurant Inc., No. 16-CV-1155, 2017 WL 1194242, at *3 (S.D.N.Y. Mar. 30, 2017); 12
N.Y.C.R.R. § 146-1.6. Unlike overtime compensation, “spread of hours” includes “working
time plus time off for meals plus intervals off duty.” Leon Neri v. Abi Japanese Rest., Inc., No.
20-CV-581, 2021 WL 6804252, at *9 (quoting N.Y. Comp. Code R. & Regs. tit. 12 § 146-1.6),
aff’d, 2023 WL 2395995 (2d Cir. Mar. 8, 2023).
Plaintiff alleges that throughout his employment period, he worked approximately 10
hours and 45 minutes per day for six days per week, plus two additional days per month. See
Mogollan Aff. ¶¶ 4, 6-7. He further alleges that defendants failed to pay him for an additional
hour of pay at the minimum wage for those days. See id. ¶ 7. Accordingly, the Court
recommends granting plaintiff’s request for spread-of-hours pay as set forth in the table below:
Spread-of-Hours Compensation
Gourmet Deli
Time Period Weeks Minimum Wage Spread of Hours Days Total
5/14/19 - 12/31/19 33 $13.50 6.517 $2,895.75
1/1/20 - 12/31/20 52 $15.00 6.5 $5,070.00
1/1/21 - 12/31/21 52 $15.00 6.5 $5,070.00
1/1/22 - 12/31/22 52 $15.00 6.5 $5,070.00
1/1/23 - 8/15/23 32 $15.00 6.5 $3,120.00
Subtotal $21,225.75
Deli & Grocery
8/16/23 - 12/31/23 20 $15.00 6.5 $1,950.00
1/1/24 - 10/31/24 43 $16.00 6.5 $4,472.00
Subtotal $6,422.00
Combined Total $27,647.75
D. Liquidated Damages
The FLSA and the NYLL both allow for liquidated damages awards equaling 100 percent
of the wages due. See 29 U.S.C. § 216(b); N.Y. Lab. Law § 663(1). Under the FLSA, a district
court is “generally required” to award a plaintiff liquidated damages equal in amount to the
unpaid minimum and/or overtime wages, Barfield v. NYC Health & Hosps. Corp., 537 F.3d 132,
150 (2d Cir. 2008); however, courts may, in their discretion, decline to award liquidated damages
where employers “show[] to the satisfaction of the court” that they acted in good faith and
reasonably believed they did not violate the FLSA. See 29 U.S.C. § 260. Similarly, the NYLL
permits employees to recover “an additional amount as liquidated damages equal to one hundred
percent of the total amount of such underpayments found to be due,” “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 § 663(1).
17 Plaintiff estimates one-half “spread day” per week to account for the twice per month that plaintiff
worked a seventh day per week. See Dkt. 29-3 (estimating 6.5 spread days per week).
Because “there are no meaningful differences” between the FLSA and NYLL liquidated
damages provisions, the Second Circuit has interpreted the two statutes “as not allowing
duplicative liquidated damages for the same course of conduct.” Rana v. Islam, 887 F.3d 118,
123 (2d Cir. 2018). “In light of the principle that the law providing the greatest recovery will
govern, [p]laintiff may be awarded liquidated damages pursuant to the NYLL or the FLSA.”
Jian Hua Li v. Chang Lung Grp. Inc., No. 16-CV-6722, 2020 WL 1694356, at *14 (E.D.N.Y.
Apr. 7, 2020) (internal quotation marks and citation omitted). However, “[l]iquidated damages
are not available for violations of the NYLL wage notice and statement provisions.” Id.; N.Y.
Lab. Law § 198(1-a), (1-d).
Here, defendants, having defaulted, have failed to make a showing of good faith. See Lu
Fan, 2019 WL 1549033, at *11. As this Court has calculated plaintiff’s damages according to
the NYLL, plaintiff is entitled to 100 percent of his unpaid wages, overtime, and spread of hours
as liquidated damages. See Ortega, 2024 WL 4751732, at *11. Accordingly, this Court
recommends awarding plaintiff $183,354.62 ($43,940.00 (unpaid minimum wages) + $80,631.25
(unpaid overtime) + $31,135.62 (time-shaved overtime) + $27,647.75 (spread of hours)) in
liquidated damages.
E. Statutory Damages under the Wage Theft Prevention Act
Section 195(1)(a) of the NYLL requires employers to provide employees at the time of
hiring with a wage notice containing, among other things, the rate of pay, the basis thereof, and
the pay schedule. Violations of section 195(1) carry damages of $50 per workday, up to a
maximum of $5,000. See N.Y. Lab. Law § 198(1-b). Further, section 195(3) of the NYLL
requires employers to furnish employees with “a statement with every payment of wages, listing
information about the rate and basis of pay, any allowances and deductions, and the employer’s
identity and contact details.” Rojas v. Splendor Landscape Designs Ltd., 268 F. Supp. 3d 405,
412 (E.D.N.Y. 2017) (internal quotation marks and citation omitted). After February 27, 2015,
violations of section 195(3) carry damages of $250 per workday, up to a maximum of $5,000.
N.Y. Lab. Law § 198(1-d).
Here, plaintiff alleges that he never received a wage notice or wage statements from the
defaulting defendants at any point throughout the course of his employment. See Mogollan Aff.
¶¶ 11-12. Because plaintiff worked without a wage notice for each defendant, for more than 100
days, and without a wage statement for more than 20 days, this Court recommends awarding
plaintiff the maximum statutory damages of $5,000 for violations of N.Y. Lab. Law § 195(1),
and $5,000 for violations of N.Y. Lab. Law § 195(3), for a total of $10,000 against each
defendant. See Duchitanga, 2021 WL 7906539, at *16; Sarmiento Perez, 2020 WL 1364908, at
*6; Jianmin Jin v. Shanghai Original, Inc., No. 16-CV-5633, 2019 WL 3244187, at *5
(E.D.N.Y. July 19, 2019), aff’d, 990 F.3d 251 (2d Cir. 2021).
F. Allocation of Liability
As discussed above, the Court recommends that Deli & Grocery (successor employer) be
held jointly and severally liable for the FLSA violations of Gourmet Deli (predecessor
employer), but not Gourmet Deli’s NYLL violations, pursuant to successor liability. Thus, the
Court calculates damages for each defendant’s ownership period and calculates the portion of
damages for FLSA violations committed by Gourmet Deli, for which Deli & Grocery is jointly
and severally liable, during the period May 14, 2022 until August 15, 2023 (the relevant period
before Deli & Grocery purchased the business). The allocation of damages for joint and several
liability is set forth below:
Joint and several liability for unpaid minimum wages
Period Weeks Paid Min. Min. Wage - Hours Total
Wage Wage Paid Wage
5/14/22 - 12/31/22 33 $10 $15 $5 40 $6,600.0018
1/1/23 - 8/15/23 32 $10 $15 $5 40 $6,400.00
Total $13,000.00
Joint and several liability for unpaid straight overtime
Period Weeks Paid Overtime Overtime - Overtime Total
Wage Rate Paid Wage Hours
5/14/22 - 12/31/22 33 $10 $22.5019 $12.50 25 $10,312.5020
1/1/23 - 8/15/23 32 $10 $22.50 $12.50 25 $10,000.00
Total $20,312.50
Joint and several liability for time shaving
Period Weeks Overtime Overtime Total
Rate Hours
5/14/22 - 12/31/22 33 $22.5021 4.8822 $ 3,623.40
1/1/23 - 8/15/23 32 $22.50 4.88 $ 3,513.60
Total $7,137.00
Gourmet Deli Grill Corp. and Deli & Grocery Food Inc. are jointly and severally liable in
the total amount of $40,449.50 ($13,000.00 + $20,312.50 + $7,137.00 = $40,449.50) for
Gourmet Deli Grill’s FLSA violations and $40,449.50 in liquidated damages.
The damages for each defendant calculated based on defendant’s ownership period is set
forth below:
18 $5 (difference between minimum wage and actual amount paid) x 40 (hours per week) x 33 (weeks) =
$6,600.
19 See footnote 14, above.
20 $12.50 (difference between overtime rate and actual wage paid) x 25 (hours per week) x 33 (weeks) =
$10,312.50.
21 See footnote 14, above.
22 See footnote 16, above.
Defendant Gourmet Deli Deli & Grocery Total
Minimum wages owed $42,220.00 $1,720.00 $43,940.00
Unpaid overtime $67,206.25 $13,425.00 $80,631.25
Time shaving $23,903.46 $7,232.16 $31,135.62
Spread of Hours $21,225.75 $6,422.00 $27,647.75
Liquidated damages $154,555.46 $28,799.16 $20,000.00
WTPA damages $10,000.00 $10,000.00 $183,354.62
Total $319,110.92 $67,598.32 $386,709.24
Conclusion
For the reasons set forth above, this Court respectfully recommends:
(1) granting plaintiff’s motion for a default judgment in substantial part against
defendants Gourmet Deli Grill Corp. and Deli & Grocery Food Inc., and entering judgment
against the defaulting defendants;
(2) awarding plaintiff damages against Gourmet Deli Grill Corp. in the total amount of
$319,110.92, consisting of $42,220 in unpaid minimum wages, $67,206.25 in unpaid overtime
compensation for regular hours, $23,903.46 for time-shaving overtime compensation,
$21,225.75 for spread of hours, $154,555.46 in liquidated damages, and $10,000 in statutory
damages;
(3) of that amount, awarding plaintiff damages against Gourmet Deli Grill Corp. and Deli
& Grocery Food Inc., jointly and severally, in the amount of $40,449.50 for Gourmet Deli Grill
Corp.’s FLSA violations and $40,449.50 in liquidated damages on that amount; and
(4) awarding plaintiff damages against Deli & Grocery Food Inc. for its own violations in
the total amount of $67,598.32, consisting of $1,720.00 in unpaid minimum wages, $13,425.00
in unpaid overtime compensation for regular hours, $7,232.16 for time-shaving overtime
compensation, $6,422.00 for spread of hours, $28,799.16 in liquidated damages, and $10,000 in
statutory damages.
A copy of this Report and Recommendation is being electronically served on counsel.
Further, the Court directs plaintiff’s counsel to serve a copy of this Report and Recommendation
by overnight mail and first-class mail to defendants at their last known address and to file proof
of service on ECF by March 5, 2026. Any objections to the recommendations made in this
Report must be filed with the Honorable Nina R. Morrison within 14 days after the filing of this
Report and Recommendation and, in any event, on or before March 16, 2026. See 28 U.S.C.
§ 636(b)(1); Fed. R. Civ. P. 72(b)(2). Failure to file timely objections may waive the right to
appeal the District Court’s order. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 6(a), 6(d), 72; Small
v. Sec’y of Health & Human Servs., 892 F.2d 15, 16 (2d Cir. 1989) (per curiam) (discussing
waiver under the former ten-day limit).
SO ORDERED
Dated: Brooklyn, New York
March 2, 2026
s/ James R. Cho
James R. Cho
United States Magistrate Judge