Caltenco v. G.H. Food, Inc. ( 2020 )

19-3601-cv
Caltenco v. G.H. Food, Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed
on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this Court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 8th day of October, two thousand twenty.
PRESENT: JOSÉ A. CABRANES,
BARRINGTON D. PARKER,
MICHAEL H. PARK,
Circuit Judges.
EDMUNDO CALTENCO,
Plaintiff-Appellant, 19-3601-cv
v.
G.H. FOOD INC., DBA NATURAL GARDEN, and
GURDIP SINGH RANGHWA,
Defendants-Appellees.
FOR PLAINTIFF-APPELLANT: Caitlin Duffy, Borelli & Associates,
P.L.L.C., New York, NY.
FOR DEFENDANTS-APPELLEES: Joseph M. Labuda, Milman Labuda Law
Group PLLC, Lake Success, NY.
Appeal from an order of the United States District Court for the Eastern District of New
York (Vera M. Scanlon, Magistrate Judge).
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UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the District Court be and hereby is
AFFIRMED IN PART AND VACATED AND REMANDED IN PART.
Plaintiff Edmundo Caltenco (“Caltenco”) sued Defendants G.H. Food Inc. (aka “Natural
Garden”) and Gurdip Singh Randhawa (“Defendants”), alleging violations of the Fair Labor
Standards Act (“FLSA”) and the New York Labor Law (“NYLL”) and seeking to recover, inter alia,
unpaid overtime and minimum wages. Following a three-day bench trial, the District Court
concluded that Natural Garden and Singh had committed multiple FLSA and NYLL violations,
including overtime violations under both laws, as well as minimum wage, spread-of-hours, and wage
statement violations under the NYLL. In light of these violations, the District Court awarded
Caltenco $7,749.79 in damages plus interest, a figure based in part on unpaid wages and overtime for
the year 2015, and a week in 2010 and a week in 2014. We assume the parties’ familiarity with the
underlying facts, the procedural history of the case, and the issues on appeal.
Caltenco argues that the District Court erred as a matter of law by failing to calculate his
damages according to the weekly wage standard set forth in § 778.113 of the regulations. But the
District Court found that Caltenco was paid hourly, not weekly. Per the District Court’s findings,
Caltenco was paid a “weekly salary” which “generally closely tracked the New York minimum wage”
and which “covered” Caltenco’s 62-hour workweek. Caltenco v. G.H. Food Inc., No. 1:16-cv-01705-
VMS, 2019 WL 4784065 at *8 (E.D.N.Y. Sept. 30, 2019). The Court found further that “Plaintiff’s
hourly rate began as $7.50 for his regular hours, and $11.25 for his overtime hours rounded up to
$550.” Id. The District Court also found that Defendants tracked employees’ hours by recording
each employee’s arrival and departure time on a daily basis, and then, at the end of the week,
“enter[ing] the names, hours and days into a composition notebook to calculate the employees’ pay.”
Id. at *6. The District Court credited these records as being “accurate records of Plaintiff’s hours
worked and wages paid.” Id.
When reviewing a judgment of the district court following a bench trial, we review findings
of fact for clear error and conclusions of law de novo. Roberts v. Royal Atl. Corp., 542 F.3d 363, 367
(2d Cir. 2008). Here, the District Court did not clearly err in finding that Caltenco was paid hourly.
Therefore, contrary to Caltenco’s assertion, neither 29 C.F.R. § 778.113, nor 29 C.F.R. § 778.325applies. Under those regulations, a wage is considered a “weekly salary” if “the employee is
employed solely on a weekly salary basis.” 29 C.F.R. § 778.113 (emphasis added). That is, independent
of hours worked in the week.
That said, Caltenco is right that the District Court calculated his damages incorrectly—but
for different reasons. In at least two instances—the week of August 8, 2010 and the week of April
20, 2014—the District Court erred in its calculation of Caltenco’s regular rate of pay.
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When calculating damages in wage-and-hours cases, the starting point is the employee's
“regular rate” of pay, see 29 C.F.R. § 778.108, which is the hourly rate when “the employee is
employed on the basis of a single hourly rate.” 29 C.F.R. § 778.110(a); see also 12 N.Y.C.R.R. § 142-
2.16 (“The term regular rate shall mean the amount that the employee is regularly paid for each hour
of work.” (emphasis in original)). The “regular rate” is important for calculating damages, including
overtime pay, which is one and a half times the “regular rate.” See 29 U.S.C. § 207(a)(1); 12
N.Y.C.R.R. § 142-2.2; 12 N.Y.C.R.R. § 146-1.4. The regular rate “is not an arbitrary label chosen by
the parties; it is an actual fact. Once the parties have decided upon the amount of wages and the
mode of payment the determination of the regular rate becomes a matter of mathematical
computation, the result of which is unaffected by any designation of a contrary ‘regular rate’ in the
wage contracts.” Walling v. Youngerman-Reynolds Hardwood Co., 325 U.S. 419, 424-25 (1945).
For the week of August 8, 2010, the District Court purported to calculate Plaintiff’s regular
rate “[b]ased upon his negotiated hourly rates of $7.50 per regular hour and $11.25 per overtime
hour.” Caltenco, 2019 WL 4784065, at *12. However, this is inconsistent with the District Court’s
finding that “Plaintiff’s hourly rate began as $7.50 for his regular hours, and $11.25 for his overtime
hours rounded up to $550” for his usual 62-hour week. Id. at *8 (emphasis added). Because the regular
rate is an actual fact, the District Court clearly erred when it failed to include the “round up” to $550
when making its calculations. See Gorman v. Consolidated Edison Corp., 488 F.3d 586, 597 (2d Cir. 2007)
(citing Walling, 325 U.S. at 424–25); 29 C.F.R. § 778.108 (same). Similarly, for the week of April 10,
2014, the District Court should have calculated Caltenco’s actual regular rate based on his then-
weekly wage of $600.
Finally, Caltenco argues that the District Court’s entered judgment did not properly calculate
or reflect prejudgment interest. On this point, he is correct. Here, the District Court ordered
Defendants “to pay Plaintiff a total damages award of $7,749.49.79, which includes $973.24 in
unpaid wages, $414.75 in unpaid spread-of-hours premiums, $1,361.80 in liquidated damages, and
$5,000.00 in statutory damages for violating the wage statement provision of the NYLL, plus pre-
judgment interest under the NYLL calculated at $0.31 per day from July 2, 2015, $0.01 per day from
August 9, 2010, and, $0.02 per day from April 20, 2014, until the date judgment is entered.” Caltenco,
2019 WL 4784065, at *15 (emphasis added). Meanwhile, the Clerk of Court entered judgment in the
“amount of [s]even thousand, seven hundred forty-nine and 89/100 dollars ($7,749.79), which
includes prejudgment interest at the rate of 9.00% plus post judgment interest at a rate of 1.59% per
annum, along with costs.” Joint App’x 1794 (emphasis added). Accordingly, we vacate and remand
the October 30, 2019 judgment of the District Court with instructions to re-enter judgment
including prejudgment interest.
CONCLUSION
We have reviewed all of the Appellant’s remaining arguments and find them to be without
merit. For the foregoing reasons, we AFFIRM the October 30, 2019 judgment of the District
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Court, except to the extent that we VACATE and REMAND the judgment of the District Court
with instructions to recalculate Caltenco’s “regular rate” of pay and to re-enter judgment including
prejudgment interest.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
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