A Manhattan federal court judge ruled that the owner of the Kum Gang San restaurants, Ji Sung Yoo, fraudulently transferred his property to his wife in order to avoid paying a wage theft judgment of $2.7 million to 11 Asian and Latino workers. The 2012 lawsuit filed by 11 workers, claimed overtime, minimum wage and spread of hours pay violations under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL).
The workers were represented in both cases by attorneys from the Asian American Legal Defense and Education Fund (AALDEF) and LatinoJustice PRLDEF. AALDEF Ken Kimerling Legal Director and lead trial attorney on the cases, said: "This is the first time a court has recognized that workers can use fraudulent conveyance laws to collect wage theft judgments, even if the conveyances took place prior to their lawsuit." He noted the historic growth of wage theft claims by low-wage workers over the past decade. At the same time, Kimerling said, it has become increasingly difficult to collect judgments from employers who hide their assets to avoid paying their workers. By allowing workers to set aside fraudulent conveyances that took place before their wage theft litigation, they can preserve their rights to collect back wages and damages when they win a court judgment."
Former Asian and Latino workers at Kum Gang San, regularly worked 12-hour shifts, with no breaks, 6 or 7 days a week and without overtime pay. The restaurant also kept part of their tips and fired workers who did not “volunteer” harvesting vegetables at a farm owned by an owner’s friend. When Mr. Yoo learned that some workers were going to sue him, the restaurant threatened workers with blacklisting and deportation. In March 2015, after a four-day trial, federal Magistrate Judge Michael Dolinger issued a 161-page opinion finding that Kum Gang San had paid “grossly substandard wages" and awarding $2.7 million to the eleven workers.
“We’re very happy that SDNY Federal Judge Robert W. Sweet saw through the employer’s financial shenanigans which were dissected, scrutinized, and now reversed. The workers’ back wages award will finally be enforced. This payout signifies a just, joyful and historic moment for our immigrant clients and their families,” said LatinoJustice’s Senior Counsel Jackson Chin.
AALDEF Legal Director Kimerling added, “This is an important victory for all workers who are being underpaid by their employers. The damages obtained in these wage theft cases are substantial. The owners and others responsible for the underpayments will be chased down, their fraudulent conveyances reversed, and they will be made to pay the wages and penalties that they owe.”