09-4890-cv
Zheng v. Liberty Apparel Co.
1 UNITED STATES COURT OF APPEALS
2
3 FOR THE SECOND CIRCUIT
4
5 August Term, 2009
6
7
8 (Argued: July 15, 2010 Decided: August 10, 2010)
9
10 Docket No. 09-4890-cv
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13
14 LING NAN ZHENG, REN ZHU YANG, YUN ZHEN
15 HUANG, WEN QIN LIN, SAI BING WANG, YE
16 BIAO YANG, RONG YUN ZHENG, HUI FANG LIN,
17 XIU YING ZHENG, JIN PING LIN, HUI MING
18 DONG, YU BING LUO, SAU CHI KWOK, SAI XIAN
19 TANG, YI ZHEN LIN, RUI FANG ZHANG, MEI
20 JUAN YU, MEI YING LI, QIN FANG QIU, YI
21 MEI LIN, MEI ZHU DONG, FUNG LAM, XIU ZHU
22 YE, SING KEI LAM, XUE JIN LIN,
23
24 Plaintiffs-Appellees,
25
26 CUI ZHEN LIN,
27
28 Plaintiff,
29
30 -v.-
31
32 LIBERTY APPAREL COMPANY, INC., ALBERT
33 NIGRI, HAGAI LANIADO,
34
35 Defendants-Cross-Claimants
36 -Appellants,
37
38 NGON FONG YUEN, 88 FASHION INC., TOP
39 FIVE SPORTSWEAR, INC., S.P.R.
40 SPORTSWEAR, INC., 91 FASHION INC.,
41
42 Defendants,
43
44 LAI HUEN YAM, also known as Steven
1 Yam, 998 FASHIONS INC., 103 FASHION
2 INC.,
3
4 Defendants-Cross-Defendants.
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7
8 Before: JACOBS, Chief Judge, PARKER and HALL,
9 Circuit Judges.
10
11 Appeal from a judgment entered in the United States
12 District Court for the Southern District of New York
13 (Sullivan, J.), after a jury verdict finding that appellants
14 acted as a joint employer of the plaintiff garment workers,
15 and are liable for unpaid and underpaid wages pursuant to
16 the Fair Labor Standards Act, New York state analogs, and
17 New York Labor Law § 345-a(1). We affirm. We consider the
18 defendants’ remaining arguments in a summary order filed
19 contemporaneously with this opinion.
20 VANO I. HAROUTUNIAN (Will
21 Levins, on the brief), Ballon
22 Stoll Bader & Nadler, P.C., New
23 York, New York , for Appellants.
24
25 JAMES REIF (Anna Roberts on the
26 brief), Gladstein, Reif &
27 Meginniss, LLP, New York, New
28 York, for Appellees.
29
30
31 PER CURIAM:
32
33 Plaintiff s-appellees are 25 Chinese garment workers
2
1 living and working in New York City’s Chinatown. In 1999,
2 they sued Liberty Apparel Company and its principals Albert
3 Nigri and Hagai Laniado (collectively, “the Liberty
4 Defendants”), and others, for violations of the Fair Labor
5 Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., New York
6 state analogs, see N.Y. Labor Law § 652(1); N.Y. Comp. Codes
7 R. & Regs. tit. 12, § 142-2.2, and New York Labor Law § 345-
8 a(1). After a lengthy procedural history, the case went to
9 a jury trial, and the principal issue was whether the
10 Liberty Defendants were plaintiffs’ “joint employer” for
11 purposes of the FLSA and New York state analogs. The jury
12 returned a verdict in favor of plaintiffs, and following
13 resolution of various post-trial motions, the United States
14 District Court for the Southern District of New York
15 (Sullivan, J.) entered judgment accordingly.
16 The Liberty Defendants appeal that judgment. In this
17 opinion, we consider their contention that the district
18 court--rather than the jury--should have determined whether
19 the Liberty Defendants were plaintiffs’ joint employer. And
20 on that issue, we affirm. We consider the Liberty
21 Defendants’ remaining arguments in a summary order filed
22 contemporaneously with this opinion.
3
1
2 I
3 The full factual background of this case is set forth
4 in Judge Casey’s opinion in Zheng v. Liberty Apparel Co.,
5 No. 99-Civ-9033, 2002 WL 398663, at *1-2 (S.D.N.Y. Mar. 13,
6 2002) (“Zheng I”). We recount only those facts necessary to
7 resolve the single legal issue that requires an opinion.
8 Plaintiffs’ direct employer was Lai Huen Yam, who owned
9 and operated a factory where plaintiffs worked in New York
10 City’s Chinatown. In 1997, Yam entered into a business
11 relationship with the Liberty Defendants. Liberty would
12 deliver partially-finished clothes to Yam’s factory, and
13 plaintiffs would finish the clothes by sewing the fabrics
14 together and adding buttons, labels, cuffs, and hems. The
15 Liberty Defendants would regularly send quality control
16 representatives to the Factory to supervise plaintiffs’
17 work.
18 The dealings between Yam and the Liberty Defendants
19 were non-exclusive; Yam’s employees (including plaintiffs)
20 did work for other manufacturers, and the Liberty Defendants
21 subcontracted work to approximately 30-40 other factories.
22 Nonetheless, plaintiffs testified that approximately 70 to
4
1 80 percent of their work was done on Liberty garments. The
2 Liberty Defendants paid Yam by the piece (not the hour), and
3 Yam paid plaintiffs the same way.
4 On average, each plaintiff worked more than 85 hours
5 per week. When they were paid for their work--which was not
6 always--they were paid at a rate below the federal and state
7 minimums, and they were never paid overtime.
8 On August 19, 1999, plaintiffs sued Yam and the Liberty
9 Defendants for violations of the minimum wage and overtime
10 provisions of the FLSA and New York state analogs; they also
11 brought a claim pursuant to New York Labor Law § 345-a(1).
12 Plaintiffs later voluntarily dismissed their claims against
13 Yam, either because he could not be located or had ceased
14 doing business.
15 The parties cross-moved for summary judgment, and by
16 opinion and order dated March 13, 2002, the court granted
17 the Liberty Defendants’ motion in part and denied
18 plaintiffs’ motion in full. Zheng I, 2002 WL 398663, at *1.
19 Applying the four-factor joint employment test articulated
20 in Carter v. Dutchess Community College, 735 F.2d 8, 12 (2d
21 Cir. 1984), the court held that the Liberty Defendants were
22 not plaintiffs’ joint employer within the meaning of the
5
1 FLSA and analogous New York state laws. Zheng I, 2002 WL
2 398663, at *7.
3 Plaintiffs appealed, and this Court vacated and
4 remanded on the ground that the district court applied the
5 wrong test for determining joint employment. Zheng v.
6 Liberty Apparel Co., 355 F.3d 61, 64 (2d Cir. 2003) (“Zheng
7 II”). Extrapolating from Second Circuit and Supreme Court
8 precedent, Zheng II identified six specific factors relevant
9 to whether the Liberty Defendants were plaintiffs’ joint
10 employer:
11 (1) whether Liberty’s premises and equipment were
12 used for the plaintiffs’ work; (2) whether [Yam’s
13 Factory] had a business that could or did shift as
14 a unit from one putative joint employer to another;
15 (3) the extent to which plaintiffs performed a
16 discrete line-job that was integral to Liberty’s
17 process of production; (4) whether responsibility
18 under the contracts could pass from one
19 subcontractor to another without material changes;
20 (5) the degree to which the Liberty Defendants or
21 their agents supervised plaintiffs’ work; and (6)
22 whether plaintiffs worked exclusively or
23 predominantly for the Liberty Defendants.
24
25 Id. at 72.
26 In language particularly relevant to this appeal, Zheng
27 II identified “three types of determinations” that bear on
28 the analysis of these factors: “First, there are historical
29 findings of fact that underlie each of the relevant factors.
6
1 Second, there are findings as to the existence and degree of
2 each factor. Finally, there is the conclusion of law to be
3 drawn from applying the factors, i.e., whether an entity is
4 a joint employer.” Id. at 76. “The first two
5 determinations . . . are findings of fact that must be
6 accepted on appeal unless clearly erroneous.” Id.; see also
7 id. at 76 n.13 (noting “[t]he fact-intensive character of
8 the joint employment inquiry”). “Only the last
9 determination--the ultimate decision as to whether a party
10 is an employer--is a legal conclusion that is reviewed de
11 novo.” Id. at 76. Zheng II also clarified that “[s]hould
12 the District Court, on remand, deny summary judgment in
13 favor of defendants, it will be incumbent upon the Court to
14 conduct a trial.” Id. at 77.
15 On remand, the defendants again moved for summary
16 judgment, and on May 23, 2008, Judge Sullivan denied that
17 motion. Zheng v. Liberty Apparel Co., 556 F. Supp.2d 284,
18 287 (S.D.N.Y. 2008) (“Zheng III”). The court determined
19 that, while there was no genuine issue of fact that the
20 first, second, and fourth Zheng II factors weighed in the
21 Liberty Defendants’ favor, there was a dispute of fact
22 regarding factors three, five, and six. Id. at 289-95.
7
1 On February 11, 2009, after a two-and-a-half week
2 trial, the jury found in plaintiffs’ favor. The court
3 denied the Liberty Defendants’ post-verdict motions to set
4 aside the verdict and for a new trial. By final judgment
5 entered October 26, 2009, plaintiffs were awarded
6 $556,566.76 in damages.
7 The Liberty Defendants now appeal that judgment. As to
8 the FLSA and the analogous state law claims, they argue
9 that (1) the district court improperly allowed the jury to
10 determine the “ultimate legal question” whether the Liberty
11 Defendants were plaintiffs’ joint employer, whereas instead
12 the court itself should have resolved that issue; (2) the
13 district court refused to charge the jury that, as a matter
14 of law, three of the six Zheng II factors weighed in the
15 Liberty Defendants’ favor (to some degree); and (3) as a
16 matter of law, plaintiffs’ evidence was insufficient to
17 support the jury’s finding of joint employment. As to the
18 § 345-a(1) claim, the Liberty Defendants argue that (1) the
19 statute does not authorize a private right of action, and,
20 alternatively, (2) whether it authorizes a private right of
21 action raises a novel and complex issue of state law such
22 that the district court should have declined to exercise
8
1 supplemental jurisdiction over that claim, see 28 U.S.C.
2 § 1367(c)(1).
3 This opinion is confined to an analysis of whether the
4 district court properly allowed the jury to make the joint-
5 employment determination. We conclude that it did. The
6 Liberty Defendants’ remaining arguments are considered in a
7 summary order filed contemporaneously with this opinion.
8
9 II
10 In the context of a jury trial, the question whether a
11 defendant is a plaintiffs’ joint employer is a mixed
12 question of law and fact. Such questions “involve[] the
13 application of a legal standard to a particular set of
14 facts.” Richardson v. N.Y. State Dep’t of Corr. Serv., 180
15 F.3d 426, 437 (2d Cir. 1999) (internal quotation marks
16 omitted). “FLSA claims typically involve complex mixed
17 questions of fact and law . . . .” Barrentine v. Arkansas-
18 Best Freight Sys., 450 U.S. 728, 743 (1981); cf. Holzapfel
19 v. Town of Newburgh, N.Y., 145 F.3d 516, 521 (2d Cir. 1998).
20 The jury’s role was to apply the facts bearing on the
21 multi-factor joint employment inquiry to the legal
22 definition of joint employer, as that term had been
9
1 (properly) defined by the district court in the jury charge.
2 “[M]ixed questions [of law and fact] are ‘especially well-
3 suited for jury determination . . . .’” Richardson, 180
4 F.3d at 437 (quoting Mendell v. Greenberg, 927 F.2d 667, 673
5 (2d Cir. 1990)); see also Kirsch v. Fleet St., Ltd., 148
6 F.3d 149, 171 (2d Cir. 1998); Simms v. Vill. of Albion,
7 N.Y., 115 F.3d 1098, 1110 (2d Cir. 1997) (“A mixed question
8 of fact and law may be submitted to the jury only if the
9 jury is instructed as to the applicable legal standards.”).
10 In the Liberty Defendants’ view, the district court
11 should have provided a special verdict form so that the jury
12 could detail its factual findings regarding the various
13 joint employment factors, and so that the district court
14 could then have applied those findings to make the final
15 determination as to joint employment. But such a rule would
16 distort the jury’s proper role, described above, of applying
17 law to fact. Moreover, requiring the use of a special
18 verdict form would be anomalous in the law, cf. Fed. R. Civ.
19 P. 49(a); Kirsch, 148 F.3d at 171; 9B C. Wright & A. Miller,
20 Federal Practice & Procedure § 2505 (“Wright & Miller”); and
21 appellate courts rarely--if ever--vacate for failure to use
22 a special verdict form, see Skidmore v. Balt. & O.R. Co.,
10
1 167 F.2d 54, 67 (2d Cir. 1948) (“[W]e cannot hold that a
2 district judge errs when, as here, for any reason or no
3 reason whatever, he refuses to demand a special verdict,
4 although we deem such verdict usually preferable to the
5 opaque general verdict.”); Wright & Miller § 2505 (“[A]s
6 numerous courts have held, as evidenced by the many cases
7 cited in the note below, the exercise of th[e trial court’s
8 discretion in using a general rather than a special verdict
9 form] is not likely to be overturned on appeal.”).
10 The Liberty Defendants’ reliance on language from Zheng
11 II is misplaced. That decision recognized that the joint
12 employment question is a mixed one of law and fact:
13 “Finally, there is the conclusion of law to be drawn from
14 applying the factors, i.e., whether an entity is a joint
15 employer.” Zheng II, 355 F.3d at 76 (emphasis added); cf.
16 id. at 76 n.13 (noting “[t]he fact-intensive character of
17 the joint employment inquiry”). Moreover, to the extent
18 Zheng II contemplated de novo review of a joint employment
19 determination, it did so only in the context of summary
20 judgment, not a jury trial. De novo review of a jury’s
21 joint employment determination would necessitate use of a
22 special verdict--which, as we explained above, we do not
11
1 require--and would cause the appellate court to tease apart
2 the interwoven elements of facts and law, a project that
3 would raise serious Seventh Amendment concerns, cf. Castillo
4 v. Givens, 704 F.2d 181, 199 (5th Cir. 1983) (Higginbotham,
5 J., concurring)--if it could even be done.
6
7 CONCLUSION
8 For the foregoing reasons, we hold that the district
9 court properly submitted the joint employment issue to the
10 jury. The judgment of the district court is affirmed,
11 subject to the partial vacatur and remand required by the
12 companion summary order. The mandate shall issue forthwith.
12