Ivanov v. Builderdome, Inc.

YANA IVANOV, Plaintiff, v. BUILDERDOME, INC. & ALEX ROZENGAUS, Defendants.

No. 19-cv-3422 (LJL)

United States District Court, S.D. New York

June 22, 2021

OPINION AND ORDER

LEWIS J. LIMAN UNITED STATES DISTRICT JUDGE.

Plaintiff Yana Ivanov (“Ivanov”) initiated this lawsuit against Defendants Builderdome Inc. (“Builderdome”) and Alex Rozengaus (“Rozengaus” and, collectively with Builderdome “Defendants”), alleging that Defendants failed to pay her minimum wages as required under the Federal Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 215, and the New York Labor Law (“NYLL”), N.Y Lab. L. §§ 650-65. Plaintiff also brought state common law claims for breach of contract and unjust enrichment and statutory claims for gender and pregnancy discrimination under the New York States Human Rights Law (“NYSHRL”) and the New York City Human Rights Law (“NYCHRL”). The Court conducted a one-day bench trial on May 3, 2021. For the reasons that follow, the Court finds for Defendants on all counts.

BACKGROUND

Plaintiff filed her complaint on April 17, 2019. Dkt. No. 1 (the “Complaint”). Plaintiff filed a motion for summary judgment on May 1, 2020, arguing that the terms of her agreement with Builderdome established that she was an employee under FLSA and the NYLL as a matter of law. Dkt. No 33. Her agreement with Builderdome (the “Agreement”) was entitled “Employment Agreement” and characterized her as an “Employee” and Builderdome as her “Employer.” Dkt. No. 1, Ex. A. On September 28 2020, the Court issued a Memorandum and Order denying Plaintiff's motion for summary judgment. Dkt. No. 40. The Court reasoned that Plaintiff's title under the Agreement was not dispositive of her status under FLSA and the NYLL. The Court held that Plaintiff's status should be determined by the economic reality of the relationship and not solely by what the parties called the relationship. See Dkt. No. 40 at 7, 9.

By letters dated February 14, 2021 and February 15, 2021, the parties consented to trial of this case to the bench. Dkt Nos. 43, 44. Defendants asked that the trial be conducted physically in open court, in the United States Courthouse, emphasizing that witness credibility was at issue. Dkt. No. 43. Plaintiff consented to a bench trial but “requested that the trial be conducted by video in order to protect the health and safety of the Court, its staff, the parties, and counsel.” Dkt. No. 44. The Court sided with Defendants, ruling that “[n]o party has identified any good cause . . . which would cause the Court to depart from the preference reflected in the Federal Rules for trials ‘in open court.'” Dkt. No. 45 (quoting Fed.R.Civ.P. 43)).

The Court conducted a one-day bench trial on May 3, 2021. Two witnesses testified-Ivanov and Rozengaus. Pursuant to the Court's order, at Dkt. No. 45, the Court received the direct testimony of each witness by declaration.^[1] See Ball v. Interoceanica Corp., 71 F.3d 73, 77 (2d Cir. 1995) (approving “the procedure allowing the parties to produce direct evidence from their witnesses in writing while permitting subsequent oral cross-examination-particularly when the parties agree to that procedure in advance.”). Each party was permitted to cross-examine the witness proffered by the other party, followed by redirect examination and then re-cross. In addition, the Court received into evidence the entire deposition transcript of the deposition of Ivanov and selected excerpts offered by Plaintiff from the deposition of Rozengaus. The following constitute the Court's findings of fact and conclusions of law. See Fed. R. Civ. P. 52.

FINDINGS OF FACT

Ivanov is a Russian national with a background in visual design with experience working for start-up companies. Tr. 16:20-24 33:13-14.

Builderdome was a start-up company based in New York. The company never successfully developed a product. The idea behind the company was to create a nationwide digital platform for contractors and builders to bid on projects submitted by homeowners for repairs and renovations to their homes. Ivanov Aff. ¶ 22; Rozengaus Aff. ¶ 1. Homeowners would use the application to complete a questionnaire providing details of their project. Ivanov Aff. ¶ 23. A scope of work would then be generated and, based upon that scope of work, contractors would make and submit bids for the job. Id. Builderdome would make money through a commission or fee from the contractor. Id. ¶ 23; Rozengaus Aff. ¶¶ 2-4; Rozengaus Dep. 46:1-46:9. In essence, the idea behind Builderdome was to serve as “a broker platform” for the construction business. Rozengaus Dep. 46:9.

Defendant Rozengaus was one of the founders of the company. He is also a Russian national and occasionally he and Ivanov would speak in Russian. Rozengaus's background is in construction but he also started, but did not complete, coursework for a degree in computer science. Tr. 87:4. An individual named Boris Coto (“Coto”) joined Builderdome six months after Ivanov. Coto was a friend of Ivanov's and Ivanov introduced him to the company. Ivanov had a romantic relationship with Coto after they both joined Builderdome. Ivanov and Coto had two children together but later split up and Ivanov subsequently sued Coto for child support. They no longer have a relationship. Tr. 27:14-29:15, 76:7-22.

Rozengaus had grand ambitions for Builderdome. Several months after its founding, the company's business plan projected that it would earn gross revenue of $262, 956, 859.00 in the three-year period following its launch. Rozengaus Aff. ¶ 5; Tr. 89:14. According to Ivanov, Rozengaus indicated to her that he hoped Builderdome would generate “high millions” in income. Ivanov Dep. 9:1-10:16. Rozengaus testified that he told her it “potentially [could] be a multi-billion dollar company.” Tr. 92:10. At another point, an executive summary Rozengaus circulated to a potential investor forecasted revenue “in the $3.5 billion range” in the company's first three years. Rozengaus Suppl. Decl. Ex. Wallace Emails at 3.

In or about June 2015, Plaintiff posted her resume on Indeed.com, a website dedicated to matching potential employers and employees. Ivanov Aff. ¶13. On June 30, 2015, Rozengaus emailed Plaintiff that he had seen her resume on Indeed and asked if Plaintiff was interested in a job opening at Builderdome. Ivanov Aff. ¶ 14; Ex. 8; Tr. 88:6-16. His email asked her to reply if she was interested in discussing “the following business opportunity. JOB DETAILS *Job Title:* Software Engineer *Company:* Builderdome Inc.” Ex. 8 at 1. Rozengaus's email, populated with the heading “Software Engineer job opening- Yana”, described Builderdome as “an early-stage venture located Brooklyn NY” and stated “[w]e are inventing a new way of doing things for an industry, pushing the boundaries of technology, creating products from scratch and defining our future as we go.” Id. Rozengaus stated: “Exciting stuff. We are always looking for talented, creative, adventurous individuals that want to make an impact now. Join us!” Id.

At the time Rozengaus emailed Plaintiff, she had never before met or heard of Rozengaus or Builderdome. Ivanov Aff. ¶15. Ivanov responded that she was interested but that she was “a designer not a developer.” Ex. 8 at 1. She pointed out that she was “taking some front end development courses on line” because it was a subject of interest and that she wanted to be involved with “UX/UI Design.” Id. She asked if Builderdome had “opportunities in this area.” Id. Rozengaus responded that he did have “openings” in Rozengaus's field of expertise and asked if she was available for a face-to-face meeting.” Id.

Ivanov and Rozengaus met on July 17, 2015. Ivanov Aff. ¶¶19, 20; Ex. 5. The meeting took place at Rozengaus's office at Avenue U and East 19th Street in Brooklyn, which Ivanov described as a “small one-room office with one window.” Tr. 13:25-14:3, 51:5-7. No staff was present and Ivanov immediately observed that Builderdome was a “startup company.” Id. 14:17-15:6. Rozengaus explained to Ivanov that he needed talented people to get the company off the ground. Id. 15:4-6. There was no discussion about salary or the hours that Ivanov would have to put in at the job. Id. 15:7-12. Rather, Rozengaus explained to Ivanov that he needed her “to create a visual appeal that he could show potential investors.” Id. 15:15-16. Rozengaus's dream was to turn the company in to a “multi hundred million dollar company, ” or even a multi-billion dollar company. Id. 15:17-20, 92:5-8. Ivanov believed in the idea and agreed to join the company after he told her that he had no worries that he would find the money to fund the company. Id. 16:8-14.

The day after the meeting Rozengaus emailed Ivanov the Agreement, which he described in the cover email as an “Employment Agreement.” Ex. 5 at 4. The Agreement was drafted by Rozengaus. Ex. 3; Ivanov Aff. ¶ 5; Rozengaus Dep. 13:6-14:5, 19:21-25:22. To save money on legal fees, Rozengaus downloaded a written agreement from an internet search he had conducted a few days earlier and made modifications based on the oral agreement he made with Ivanov. Rozengaus Dep. 13:9-14:5, 19:3-25. Ivanov signed it after making only minimal corrections. Tr. 18:4-10, 21:2-10, 25:1-18, 50:6-9.

The Agreement reflects that it was “made and entered into” on July 20, 2015, but it was signed by each of Rozengaus and Ivanov on August 25, 2015. Ex. 3 at 3. Because the language and terms of the Agreement are important, the Court describes them at length. Rozengaus signed on a signature block for the “Employer's Signature” and printed his name over a block entitled “Employer's Name Printed.” Id. In a spot designated for the “Employer's Title, ” Rozengaus identified himself as CEO. Id. Ivanov signed in a signature block...