Overtime | Use & Occupancy | Tenancy-At-Will

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Employee Failed To Prove He Worked “Gap” Periods In Unpaid Overtime Action

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In Kim v. Bogopa Inc., plaintiff Bong Chul Kim moved for summary judgment on his claim for unpaid overtime, seeking recovery of over $4,500 for violations of the Fair Labor Standards Act and related New York labor laws.

According to the decision, Kim began working as a Store Produce Manger in April 2005.  From at least the start of the year 2012 through July 2014, his hours were tracked by his employer through a punch-in/punch-out system.  Kim argued that his employer failed to compensate him for overtime because he was paid based only on the scheduled shift start and end times, and not the hours actually indicated by his punch-in and punch-out times, and that this “rounding scheme” resulted in his hours consistently being “rounded down.”  As an example, he argued that the records showed on July 30, 2012, his shift lasted 10 hours, excluding one hour (unpaid) for lunch break and he punched-in at 6:47 a.m. and punched-out at 6:06 p.m.  He alleged that for July 30, 2012, he was paid for that day eight hours in straight time and two hours in overtime; he seeks to be paid for an additional 19 minutes in overtime for that day (the sum of the 13 minutes from 6:47 a.m. to 7 a.m., and the 6 minutes from 6 p.m. to 6:06 p.m.).  After adding all the minutes for the other days for which he asserted he was not paid, Kim sought a total payment of $4,585.75 in overtime compensation, plus statutory damages equal to 100 percent of the outstanding amount, plus pre-judgment interest, plus $21,118.75 in attorney’s fees and $616.44 in costs.

His employer opposed the motion arguing that material issues of fact remain regarding 1) whether Kim was working during the pre-shift and post-shift minutes for which he sought compensation; 2) whether the employer had actual or constructive knowledge of any such work; and 3) whether Kim’s pre and post-shift time was spent performing his principal activities or activities that were integral to his principal activities or activities that were integral to his principal activities — a prerequisite for the time to be compensable.

In addressing the motion, that Court recognized New York’s rule provides that “an employer shall pay an employee for overtime at a wage rate of one and one-half times the employee’s regular rate in the manner and methods [as] provided in…the Fair Labor Standards Act of 1938, as amended….”  The Court further recognized that under the FLSA rules, although time clocks are not required, in those cases where time clocks are used, “employees who voluntarily come in before their regular starting time or remain after their closing time, do not have to be paid for such periods provided, of course, that they do not engage in any work.  Their early or late clock punching may be disregarded.  Minor differences between the clock records and actual hours worked cannot ordinarily be avoided, but major discrepancies should be discouraged since they raise a doubt as to the accuracy of the records of the hours actually worked.”

The Court said to establish liability on a claim for unpaid overtime, “the employee has the burden of proving that he or she performed work for which he or she was not properly compensated, and the employer had actual or constructive knowledge of that work,” and that “any activity that is ‘integral and indispensable’ to a ‘principal activity’ is itself a ‘principal activity’… and thus compensable under the FLSA even if performed before or after the regular shift.”  “Whether an activity is ‘integral and indispensable’ to an employee’s principal activities is a fact-dependent inquiry.”

“‘This regulation means that employees who clock in early do not have to be paid so long as they are not working.’  [A]n employee can clock in, grab a coffee, read the newspaper, and then start working once his scheduled shift begins — and an employer wouldn’t have to compensate him for that time.’  Stated another way, ‘time spent clocked in does not automatically equate to time spent working, and only time spent working is compensable.’”

The Court concluded that Kim “failed to submit an affidavit or other evidence indicating that he actually worked during the ‘gap’ periods; that is, the periods between punching-in and the start of a scheduled shift, or between the end of a scheduled shift and punching-out,” and denied the motion.

Landlord Granted Use & Occupancy Against Tenant For Subtenant’s Holdover

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In 34 W. 75th St. LLC v. Hynes, an ex-landlord sued its ex-tenant Hynes in a plenary action for unpaid use and occupancy (U&O).  In that same action, Hynes sued her ex-subtenant Thompson for indemnification in a third-party action.  Hynes’ renewal lease was to expire August 31, 2018, but Thompson indicated she would not be vacating and landlord commenced a holdover proceeding against Thompson.  The landlord argued Hynes defaulted by subletting the premises without its consent which Hynes conceded, but argued that she was not liable for U&O after she surrendered the keys to the landlord’s superintendent.

Hynes had resided in the apartment pursuant to a lease with the landlord commencing August 8, 2016, and extended by renewal lease expiring August 31, 2018.  During the subject period, Hynes paid $2,695.00 per month.  On August 1, 2018, Hynes signed a sublease with Thompson, also expiring August 31, 2018.  On August 26, 2018, Thompson notified Hynes that she would not be vacating the Apartment on August 31, 2018.  On September 26, 2018, the landlord commenced a holdover proceeding against Thompson.  On October 1, 2018, Hynes returned the keys to the landlord’s superintendent’s office.  On January 8, 2019, Thompson was evicted, and the landlord regained vacant possession.  However, the landlord received no compensation for the apartment from September 2018 through January 2019, and commenced a plenary action against Hynes for that compensation, and moved for summary judgment.

Because Hynes conceded that Thompson subsequently held over after the lease expired, the landlord argued that Hynes is liable for all unpaid use and occupancy through the date the landlord regained vacant legal possession on January 8, 2019.  In addressing this argument, the Court recognized that “‘upon termination of a lease, the tenant is obligated to remove the subtenant.  A wrongful holdover by a subtenant is deemed the same as a wrongful holding over of the prime tenant/sublessor.’  ‘Having failed to discharge his leasehold obligation to remove his licensee at the expiration of the lease term, the tenant remained responsible to the landlord for the licensee’s continued occupancy through the pendency of the summary holdover proceeding.’”

As to Hynes’ argument that she was not liable for use and occupancy past September 2018 because she surrendered the keys to the landlord’s superintendent on or about October 1, 2018, the Court said that “even crediting this assertion, however, Tenant effectively concedes owing use and occupancy through the end of October because, where rent is due and payable on the first of the month, tenants who vacate during the month are generally liable, absent an agreement to the contrary, for the entire month’s rent.  Moreover, even accepting that Tenant’s delivery of the keys constituted an offer of surrender, there must also exist a ‘meeting of the minds on the terms of surrender.’  Here, Landlord submits email correspondence between Tenant and Landlord’s agent clearly demonstrating that Landlord rejected surrender unless the Apartment was vacant.  This reflects the Lease, which explicitly states that ‘You have not moved out until all persons, furniture, and other property of yours is also out of the apartment.  If your property [persons, or furniture] remains in the Apartment after the Lease ends, Owner may either treat You as still in occupancy and charge You for use….’”  In addition, the landlord’s prompt commencement of the summary holdover proceeding to evict Thompson, “contradicts any argument that Landlord acquiesced to Subtenant’s occupancy.”  Thus, the landlord’s motion for U&O was granted.

10-Day Notice Jurisdictionally Defective; 30-Day Notice Required For Tenancy-At-Will

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In Laffey v. TCG Grp. LLC, the petitioners, including Emmett Laffey, moved to be restored to possession of a southwest corner office on the second floor of the subject premises, claiming respondents, including his brothers, Phillip and Mark, illegally locked them out.  According to the decision, Phillip and Mark, despite allegedly terminating Emmett in December 2015, waited until February 2019 to use “self-help” to evict him.  Emmett argued he was a one-third owner of the subject real estate with his brothers, and he never received a notice to vacate nor were summary proceedings brought before he sought to be restored.

Then, in a separate proceeding, the petitioners, TCG Group, LLC, Laffey Fine Homes of New York, LLC d/b/a Laffey Real Estate, U.S. 1 Laffey Real Estate Corp., Mark Laffey, and Philip Laffey, commenced a holdover summary proceeding against Emmett Laffey, Laffey Fine Homes International, LLC, and US 1 Laffey of Williston Park, Inc., by Petition dated March 12, 2019.  The Petition alleged that a 10-day notice was served upon Emmett Laffey to remove him as an alleged “licensee.”

The Court consolidated both matters for joint trial.  In its decision, the Court noted Emmett did not possess a specific right to exclusively occupy and control the southwest corner office – he had a one-third interest in a company that owned the building.

Nonetheless, the Court recognized that “a tenancy-at-will arises whenever a landlord permits another party to possess property without any agreement as to a termination date or rent payment terms,” and that a 30-day notice to terminate is necessary when a tenancy-at-will is created by an ex-employee holding over without the employer timely moving to evict the terminated employee.  “‘Also, if an employee remains in possession of a property for a considerable length of time after the relationship has been terminated, a tenancy at will may be implied by the courts, which tenancy may be terminated by a written notice of not less than 30 days given on behalf of the landlord, to the tenant, requiring the tenant to remove from the premises.  To create a tenancy at will, however, the post-employment occupancy must be sufficiently long to warrant an inference of consent to the holding different from that of an employee-licensee; how long an occupancy is required is a question to be determined from all the circumstances of the case.’”

Thus, the Court held that the 10-day notice required to terminate an alleged licensee that was served on Emmett Laffey was jurisdictionally defective.  “Emmett Laffey is a tenant-at-will and is entitled to a 30-day notice.  The self-help employed in the case at bar was illegal, and not done in a peaceful manner.”  The Court concluded that he was entitled to possession of the southwest corner office, and directed that he be given a key, “without prejudice to a proper holdover summary proceeding to evict Emmett Laffey as a tenant-at-will.”

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