Gamero v. Koodo Sushi Corp.
272 F. Supp. 3d 481
S.D.N.Y.2017Background
- Plaintiffs Israel Gamero, Norberto Mastranzo, and Oscar Sanchez sued their former employer Koodo Sushi and owner Michelle Koo for alleged FLSA and NYLL wage, overtime, spread-of-hours, notice, recordkeeping, wage-statement, tip, and tools-of-trade violations after a bench trial. The court issues findings of fact and conclusions of law.
- Key factual disputes: hours worked and method/amount of pay. Plaintiffs generally testified to ~50+ hour weeks and low fixed wages; defendants produced payroll records (Aldelo reports, calendars, login sheets, Seamless/Delivery reports) showing hourly pay and higher compliance.
- Court found Koo credible and most of defendants’ records persuasive but also found those records incomplete, inconsistent, and deficient in statutory notices and supporting documentation for tip and meal credits. Gamero’s testimony was found not credible; Sanchez and Mastranzo were credible and matched records more closely.
- Court concluded defendants paid hourly (not fixed salaries), attempted to use tip and meal credits, but failed to satisfy NYLL/FLSA notice, documentation, and recordkeeping requirements for those credits.
- Rulings: Plaintiffs prevailed on causes 1–7 (minimum wage, overtime, NY minimum wage, NY overtime, spread-of-hours, notice/recordkeeping, wage statements) but lost causes 8 (tools of the trade) and 9 (tip-withholding). Total damages awarded under NYLL: Sanchez, Mastranzo, Gamero — specific unpaid wages, liquidated damages, statutory penalties for wage-statement/notice where applicable, plus prejudgment interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs were underpaid minimum wage and overtime (FLSA & NYLL) | Plaintiffs say they worked >40–50 hrs/wk and were paid below statutory minimums and unpaid OT | Defendants rely on Aldelo, calendar, Seamless/Delivery reports to show hourly pay meeting min wage once credits applied and fewer hours than plaintiffs claim | Court: Plaintiffs proved underpayment in some weeks; defendants’ records partly persuasive but incomplete; award damages under NYLL (not double recovery under FLSA/NYLL) |
| Validity of tip credit and employer’s right to deduct tip/meal credits | Plaintiffs: Koo did not give required written notice (NYLL) or adequate notice (FLSA) and did not document meal costs/nutritional compliance, so credits invalid | Defendants: claimed they told employees of tip/meal credits and paid delivery wages accounting for credits; Seamless commission not employer withholding | Court: Tip and meal credits invalid because Koo failed to meet statutory written notice and recordkeeping requirements; Seamless commission did not constitute employer withholding of tips (NYLL §196-d) |
| Wage notice and wage-statement statutory penalties (NYLL §195) | Plaintiffs: Koo failed to provide required written wage notices and wage statements in required language and frequency | Defendants: some employees were hired before WTPA effective date; dispute over which plaintiffs can recover statutory notice damages | Court: Gamero (hired after WTPA) awarded statutory wage-notice damages; all three awarded maximum wage-statement penalties because Koo failed to provide compliant statements |
| Tip-withholding claim based on third-party (Seamless) commissions | Plaintiffs: Seamless’s retention of ~14% of tips effectively withheld tips from employees and employer is liable | Defendants: Seamless, not employer, retained commission; Koodo remitted full amount received to employees | Court: Employer did not retain tips; Seamless commission is a cost to obtain/credit tips and does not violate NYLL §196-d; claim denied (and plaintiffs sought no damages on it) |
Key Cases Cited
- Salinas v. Starjem Rest. Corp., 123 F. Supp. 3d 442 (S.D.N.Y. 2015) (standards for compensable work time and tip-credit analysis)
- Kuebel v. Black & Decker Inc., 643 F.3d 352 (2d Cir. 2011) (employee burden to prove hours and employer knowledge)
- Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946) (burden-shifting when employer fails to keep accurate records)
- Barfield v. N.Y.C. Health & Hosps. Corp., 537 F.3d 132 (2d Cir. 2008) (liquidated damages framework under the FLSA)
- Inclan v. N.Y. Hosp. Grp., Inc., 95 F. Supp. 3d 490 (S.D.N.Y. 2015) (strict construction of FLSA tip-credit notice and NYLL tip-credit requirements)
- Myers v. The Copper Cellar Corp., 192 F.3d 546 (6th Cir. 1999) (employer may deduct reasonable fee to convert charged gratuities to cash)