The following papers numbered EF 39-40, EF 43-49, and EF 52 read on this motion by defendants for an Order, pursuant to CPLR §3211(a)(7), dismissing the Complaint as to defendants Runze Yang and Yang Liu for failure to state a claim plausibly alleging that defendants Yang and Liu were employers under the FLSA and New York Labor Law.

Upon the foregoing papers, it is ordered that this motion is determined as follows:

In this putative class action, on July 20, 2024, Plaintiffs Liling Liu, Junhua Yu, Lin Cheng, on behalf of themselves and on behalf of others similarly situated, commenced this action with the filing of a Summons and Verified Complaint alleging, inter alia, that, pursuant to the Fair Labor Standards Act and in violation of New York Labor Law, plaintiffs are entitled to recover from defendants Hoffen Group Corporation d/b/a Dun Huang Long Island City, Runze Yang and Yang Liu, unpaid minimum and overtime wages, spread of time pay, pre- and post-judgment interest, and attorneys' fees and cost.

Plaintiffs were employees at Dun Huang Long Island City, a restaurant. It is plaintiffs' contention that defendant employers have willfully and intentionally committed widespread violations of the applicable Labor Laws by engaging in pattern and practice of failing to pay its employees, including plaintiffs, their wages for each hour worked and overtime compensation for all hours worked over forty (40) each work week.

According to the Verified Complaint, defendants Runze Yang and Yang Liu are officers, directors, managers and/or majority shareholders or owners of the corporate defendant Hoffen Group Corporation d/b/a Dun Huang Long Island City, and are among the ten (10) largest shareholders in the company. The Complaint alleges that these individual defendants are the parties responsible for unpaid wages under the New York Business Corporation Law. The Complaint further alleges that Runze Yang is the Chief Executive Officer of Hoffen Group Corporation and was known as the manager and owner to plaintiffs. Plaintiffs further allege in their Complaint that Runze Yang hired and supervised them, had the power to hire and fire employees, supervise and control employee work schedules or conditions of employment, determine the rate and method of payment, paid them with paychecks, and maintained employee records within defendant corporation. For these reasons the Complaint alleges that Runze Yang is an employer pursuant to 29 CFR §791.2 and New York Labor Law §2, and is jointly and severally liable.

The Complaint further claims that defendant Yang Liu, known as the Big Boss, had the power to hire and fire employees, supervised and controlled employee work schedules or conditions of employment, determined the rate and method of payment, and maintained the employee records for defendant corporation. The Verified Complaint claims that Yang Liu acted intentionally and maliciously and is an employer pursuant to 29 CFR §791.2 nad New York Labor Law § 2, and is jointly and severally liable.

Individual defendants move to dismiss plaintiffs' claims against them, maintaining that the allegations in the Verified Complaint must be dismissed because plaintiffs have failed to plead sufficient factual allegations to give rise to the plausibility that they are entitled to relief against moving defendants as "employers" under the Fair Labor Standards Act ("FLSA") and New York Labor Law ("NYLL"). Movants maintain that plaintiffs rely on scant, conclusory, and boilerplate recitations of the legal standard to insinuate employer liability against defendants Runze Yang and Yang Liu.

In opposition, plaintiffs' argue the claims against Runze Yang and Yang Liu should not be [*2]dismissed, because plaintiffs have more than adequately alleged facts sufficient to show that Runze Yang and Yang Liu had exercised control over their employment by Hoffen Group Corporation at the restaurant Dun Huang Long Island City.

On a motion to dismiss for failure to state a claim under CPLR §3211(a)(7), the Court must afford the pleading "a liberal construction" and must "accept the facts as alleged [ ] as true, accord [the nonmoving party] the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Leon v Martinez, 84 NY2d 83, 87-88 [1994]; see also, Taxi Tours Inc. v Go NY Tours, Inc., 41 NY3d 991 [2024]). Dismissal under CPLR §3211(a)(7) is warranted if a plaintiff "fails to assert facts in support of an element of the claim, or if the factual allegations and inferences to be drawn from them do not allow for an enforceable right of recovery" (Connaughton v Chipotle Mexican Grill, Inc., 29 NY3d 137, 141 [2017]).

Under Labor Law § 190(3), an employer is defined as "any person, corporation, limited liability company, or association employing any individual in any occupation, industry, trade, business or service." To determine whether an employer-employee relationship exists for purposes of New York's Labor Law, Courts apply an "economic reality" test (Bonito v Avalon Partners, Inc., 106 AD3d 625 [2013]). The factors to consider for the "economic reality" test include whether the alleged employer: (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records (Ammar v Carbone, 237 AD3d 883, 884-885 [2025]; see also, Matter of Carver v State of New York, 87 AD3d 25, 29-30 [2011], affd 26 NY3d 272 [2015]).

Viewing the Verified Complaint in a light most favorable to plaintiffs, defendants have failed to meet their burden of demonstrating that plaintiffs have not plead sufficient factual allegations to give rise to the plausibility that the individual defendants are employers under the relevant statutes and regulations. Using the economic reality test, plaintiffs have alleged facts to withstand dismissal of the action against the individual defendants at this juncture. Plaintiffs have specifically alleged that they were hired, supervised and controlled, provided work schedules, paid and managed by defendants Runze Yang and Yang Liu. Accordingly, the motion to dismiss is denied. Defendants are directed to serve and file an Answer within twenty (20) days of service of a copy of this Order with notice of its entry.