Southern District of New York Awards Emotional Distress Damages of $500,000 To Domestic Worker In Unpaid Overtime Case

Southern District of New York Awards Emotional Distress Damages of $500,000 To Domestic Worker In Unpaid Overtime Case

In March 2012, in Gurung v. Malhotra, 10 Civ. 5086 (S.D.N.Y. Mar. 16, 2012), the U.S. District Court for the Southern District of New York (Marrero, J.) awarded, to a 22-year-old domestic worker, damages of $1,458,335 against the maid's former employers - an Indian diplomat and her husband.  The diplomat and her husband, Neena and Jogesh Malhotra ("the Malhotras"), had brought the plaintiff, Shanti Gurung ("Ms. Gurung" or "the plaintiff") from her native India to New York City, had made the plaintiff work for them as a maid 16 hours per day, seven days per week, for three years, and had refused to pay the plaintiff any wages, let alone any overtime compensation.

The Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §§ 201-219 (the "FLSA"), and its corresponding regulations, 29 C.F.R. § 510 et seq., mandate that most employees in the U.S. be paid not less than the federal minimum wage of $7.25 per hour for all hours worked and overtime pay at one-and-one-half times their regular rate of pay for all hours worked in excess of 40 hours in a workweek.

Similarly, the New York State Minimum Wage Act, N.Y. Labor Law § 650 et seq., and 12 N.Y.C.R.R. Part 142 mandate that employees in New York be paid not less than the New York minimum wage of $7.25 per hour for all hours worked.  Covered employees who work overtime must be compensated at a rate that is one-and-one-half times their regular, "straight-time" hourly rate of pay.

The Gurung Court awarded to the plaintiff domestic employee, against the Malhotras, more than $600,000, under the FLSA and New York law, representing unpaid wages, unpaid overtime compensation, liquidated damages, and attorneys' fees.  The U.S. District Court for the Southern District of New York also levied, in Ms. Gurung's favor against the Malhotras, punitive damages of $300,000 .

Further, the Gurung Court awarded, to the plaintiff maid, damages of $500,000 for emotional distress under several federal statutes prohibiting human trafficking and forced servitude.  See 18 U.S.C. §§ 1584, 1589, 1590, 1592, 1595; Gurung v. Malhotra, 10 Civ. 5086, slip op. at 17-19.  The Gurung Court explained:

[18 U.S.C. §§ 1589 and 1595] authorize[] the recovery authorizes the recovery of damages [for emotional distress] from an individual who "knowingly provides or obtains the labor or services of a person . . . by means of any scheme, plan, or pattern intended to cause the person to believe that, if that person did not perform such labor or services, that person or another person would suffer serious harm or physical restraint. . . ."  In this case, Gurung has unquestionably established that the Malhotras induced her to work without pay by seizing her passport and visa, restricting her ability to leave their apartment, and constantly warning her that if she traveled on her own without their permission, she would be arrested, beaten, raped, and sent back to India as "cargo."

Take-Away

Federal law and New York law each prohibit employers from discharging or in any other manner retaliating against any employee because such employee has filed any complaint or instituted any proceeding to recover unpaid overtime compensation or minimum wages, or has testified or is about to testify in any such proceeding.  See 29 U.S.C. § 215(a)(3); N.Y. Labor Law § 215(1)(a).  Should employers in New York require yet another reason to refrain from retaliating against workers who seek to recover unpaid overtime compensation or minimum wages, the Gurung Court has provided such a reason.

Specifically, within the Southern District of New York, an employer who coerces workers, by threat of serious harm, to work overtime hours without being paid time-and-a-half may be liable, under federal law, for substantial damages for emotional distress.

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