Jin Gang Huang v Long Hing Kitchen, Inc.
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Attorneys and Parties
Brief Summary
Restaurant wage-and-hour dispute involving alleged unpaid wages, wage statement violations, and individual owner or manager liability under New York Labor Law.
After an inquest, the Supreme Court denied default judgment against the individual defendants, awarded compensatory damages only against the two corporate defendants, set liquidated damages at $0, and effectively dismissed the complaint against the individual defendants.
The Appellate Division reversed the denial of default judgment as to Jin Bao Lin, reinstated the claims against the remaining individual defendants except Jin Bao Lin for a new inquest, and held that the plaintiff must receive $21,259.19 in liquidated damages.
Because the defendants defaulted, there was no evidence of a good-faith basis for the wage underpayment, so liquidated damages were mandatory under Labor Law § 198(1-a) [employee prevailing on wage claim recovers underpayment, attorneys' fees, prejudgment interest, and 100% liquidated damages unless employer proves good faith] and Labor Law § 663(1) [employee may recover underpayment, costs, attorneys' fees, and liquidated damages]. The verified complaint and inquest testimony were sufficient to establish Jin Bao Lin's employer status, and the trial court improperly cut off testimony relevant to whether the other individual defendants were employers under the Labor Law.
Background
In June 2020, the plaintiff brought a putative class action alleging that from June 3, 2019, through October 30, 2019, he worked as a kitchen worker and delivery worker for Long Hing Kitchen, Inc. and New China Fun Restaurant, Inc., as well as several individual defendants. He asserted claims under Labor Law § 195(3) [Wage Theft Prevention Act provision requiring wage statements] and Labor Law article 19 [Minimum Wage Act governing minimum wage and related wage protections], among other wage claims. The defendants were served but did not answer or appear. The plaintiff later moved for leave to enter a default judgment under CPLR 3215(f) [requires proof of service, proof of the facts constituting the claim, and proof of the default] and for attorneys' fees and costs.
Lower Court Decision
The Supreme Court granted the motions only to the extent of setting the matter down for an inquest and a hearing on attorneys' fees. At the inquest, the plaintiff tried to testify about whether the individual defendants qualified as his employers, but the court stopped further questioning after concluding that the plaintiff could not identify their corporate positions. The court then denied default judgment against all individual defendants, awarded only $45,508.92 against the two corporate defendants jointly and severally, including $21,259.19 in compensatory damages and $0 in liquidated damages, and effectively dismissed the complaint against the individual defendants.
Appellate Division Reversal
The Appellate Division reversed insofar as appealed from. It held that liquidated damages equal to the unpaid wages were required because the defaulting defendants offered no evidence of good faith, so the plaintiff was entitled to $21,259.19 in liquidated damages. It further held that the verified complaint and the inquest testimony established that Jin Bao Lin exercised sufficient formal control over the plaintiff to qualify as an employer under the Labor Law, requiring entry of default judgment against Jin Bao Lin and joint and several liability. As to Youngdi Chou, Yi Jane Lin, Yuk Ngun Cheng, Xue Yun Chen, and Sheng Piao Chen, the court ordered a new inquest because the Supreme Court improperly prevented the plaintiff from presenting relevant testimony on their employer status. The complaint was reinstated against those defendants and the matter was remitted for further proceedings and entry of a second amended judgment.
Legal Significance
This decision reinforces that in a default wage case, liquidated damages are not discretionary when the employer offers no proof of a good-faith belief that the pay practices complied with the law. It also confirms that a verified complaint can satisfy the proof-of-claim requirement on a default motion, and that individual liability under the Labor Law turns on the economic reality and formal control tests, including hiring and firing power, supervision, pay decisions, and recordkeeping. Trial courts may not truncate an inquest in a way that prevents a plaintiff from developing evidence on those factors.
Defaulting employers in New York wage cases risk automatic 100% liquidated damages and individual liability when a verified complaint and testimony show control over the worker; courts must allow plaintiffs a fair opportunity at inquest to prove who their employers were.