754 F.Supp.3d 521
S.D.N.Y.2024Background
- Plaintiff Barry Newman was Chair of the Massage Therapy Department at ASA College, Inc., a now-defunct for-profit college.
- Newman alleged he was underpaid from 2019–2022, not receiving his promised $62,000 annual salary, and his time records were falsified to show fewer hours worked.
- Newman was also not properly compensated for vacation time, had unlawful deductions taken from his pay, and suffered from untimely wage payments.
- ASA College lost accreditation and closed in February 2023; Newman continued to work up to closure but did not receive his final wages.
- Newman filed suit in federal court, asserting claims under the Fair Labor Standards Act (FLSA), New York Labor Law (NYLL), and common law breach of contract.
- Defendants defaulted (did not appear in the case); the court entered default judgment and referred the matter to a magistrate judge to determine damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to unpaid wages and overtime | Not fully paid for all hours worked | None (defaulted) | Newman entitled to unpaid wages and overtime under NYLL |
| Defendants’ status as employer | ASA, Shchegol, and Valencia all controlled pay | None (defaulted) | All three jointly and severally liable as employers |
| Exempt employee status | Newman was not an exempt employee | None (defaulted) | Newman is non-exempt, eligible for statutory remedies |
| Damages and double recovery | Breach of contract and statutory claims both valid, but sought non-overlapping damages | None (defaulted) | Damages calculated to avoid double recovery; contractual and statutory damages both awarded where not duplicative |
Key Cases Cited
- Goldberg v. Whitaker House Co-op., Inc., 366 U.S. 28 (1961) (economic reality test for determining employer under FLSA)
- Easley v. Cromartie, 532 U.S. 234 (2001) (standard for clear error review)
- Carter v. Dutchess Community College, 735 F.2d 8 (2d Cir. 1984) (four-factor test for employer status under FLSA)
- Barfield v. New York City Health & Hosps. Corp., 537 F.3d 132 (2d Cir. 2008) (scope of employment relationship under wage laws)
- Brock v. Superior Care, Inc., 840 F.2d 1054 (2d Cir. 1988) (liquidated damages under FLSA precludes pre-judgment interest)