Judge Leonard Wexler
Plaintiffs worked at nail salons operating under the “Babi” name. In their suit over violation of federal wage, hour and employment bias laws, they were awarded a $474,011 judgment on which all defendants were jointly and severally liable. In 2011, the Babi I salon was sold to Inhae Corp. Park is an Inhae principal. In plaintiffs’ effort to collect judgment, the court imposed successor liability on Inhae. Distinguishing Kaur v. Royal Arcadia Palace and Vasquez v. Ranieri Cheese and informed by rulings in the Southern District, it decided that the “substantial continuity test” applies in cases of successor liability under the Fair Labor Standards Act (FLSA). Balancing the nine factors in EEOC v. Nichols Gas & Oil the court—relying heavily on the uncontroverted fact of Inhae’s and Park’s notice of the judgment and defendants’ likely inability to pay judgment—deemed it appropriate to impose successor liability. Discussing the four factors in Herman v. RSR Sec. Services, the court found that as Babi I’s actual buyer, Inhae was the successor liable under the FLSA. Park was never plaintiffs’ actual employer. It served neither the interests of the FLSA nor principles of equity to make Park personally liable for the judgment’s payment.
